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AE-based Mubadala Petroleum, which operates the Ruby field in Sebuku Island in the Makassar Strait, expects to start gas production in October this year, with an initial capacity of between 30 and 50 million metric standard cubic feet per day (mmscfd).

The gas will be distributed to nearby fertilizer works PT Pupuk Kaltim in East Kalimantan, Mubadala Petroleum Indonesia’s vice president for government relations & business support, Taufik Rahardjo says.

“Gas from the field will be sold entirely to meet domestic needs,” he told The Jakarta Post in Balikpapan, East Kalimantan, over the weekend.

The Ruby field is projected to produce gas for around 10 years, with an anticipated peak production of 100 mmscfd for the 4 years before the block enters a natural decline in output.

The operator is building a tripod well head platform to extract the gas and a four-leg production quarter platform where the gas will be channeled for processing.

A 312-kilometer pipeline has been constructed to carry the gas to an onshore processing plant in the Senipah field, operated by French company Total E&P Indonesie.

The Sebuku block covers 2,345 square kilometers with a water depth between 50 and 200 meters.

Mubadala Petroleum started operating the block after it acquired Singapore-based Pearl Oil (Sebuku) Limited in 2008

Mubadala Petroleum is a wholly-owned subsidiary of the Mubadala Development Company, a sovereign wealth fund of the Abu Dhabi government.

The firm operates in 12 countries, mainly in the Middle East, Africa, Central Asia and Southeast Asia, and produces 400,000 barrels of oil per day.

Last Thursday, the Energy and Mineral Resources Ministry awarded the company the right to explore the nearby West Sebuku block.

Mubadala is among 14 companies that secured rights to develop 14 oil and gas blocks, which were put out to direct tender last year.

The companies, pledging a total investment of US$84.3 million and a signature bonus worth $15.5 million will sign 3-year exploration contracts in May.

Mubadala will operate West Sebulu through a consortium with Japan-based Inpex Corporation; both hold participating interests of 75.5 percent and 24.5 percent respectively.

Steve Peacock, the company’s chief operating officer, said the company conducted a geological survey in the new block last year and that securing the right to develop the new block was important to extending Mubadala’s portfolio in Indonesia.

“The block is located near to the infrastructure we are building in Ruby Field,” Steve explained. Future production from the field will be allocated to the domestic market. (aml)