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pstream oil and gas regulator BPMigas aims to finish the long-delayed revision of the plan of development (POD) for the Kepodang field at the Muriah block off Central Java, operated by Malaysia-based Petronas Carigali, this month.

BPMigas deputy for operations Rudi Rubiandini said Tuesday the revision would include financial recalculations, gas prices, and on-stream schedules.     

“Technical details like the field’s reserves, capital expenditures, the internal rate of return and the recently agreed-upon contract extension will also be put on paper as soon as possible,” he said at his office in Jakarta.

The problem lies with uncertainties regarding the construction of a 200-kilometer-long pipeline connecting the field and state power company PT PLN’s Tambak Lorok power plant in Semarang, Rudi revealed.

The initial plan was Petronas would build the pipeline under the upstream scheme, but in 2009, the concession holder for the Kalimantan-Java (Kalija) pipeline, Bakrie & Brothers, proposed to include the Kepodang-Tambak Lorok pipeline into the Kalija project under the downstream scheme.

The Energy and Mineral Resources Ministry approved Bakrie & Brothers’ proposal in 2010, saying it would bring more revenues to the country as the government would not pay back the construction cost as stipulated in the “cost recovery” regulation.

The change in pipeline construction has consequently forced Petronas and PLN to delay the delivery of 354 billion cubic feet (bcf) of gas from the Kepodang field from the fourth quarter of 2011 to the fourth quarter of 2014.

As stipulated in the draft agreement, Petronas right’s to operate the Muriah block must also be extended from 2021 to 2026 to compensate for the delay on gas delivery and the gas price must be raised from the initial price of below US$5 per million British thermal units (mmbtu) to $5.4 mmbtu.   

However, the new gas price was still below Petronas’ proposal of $6.85 per mmbtu if the concession was not extended.

“The price for the gas had been agreed at $5.4 per mmbtu,” Rudi said.

He urged Bakrie & Brothers to construct the pipeline on schedule, otherwise, PLN would take over the construction project.

However, PLN division head for gas and oil-based fuels Suryadi Mardjoeki said his company had not received any official information from BPMigas about the gas price.

He added the price had not been clear since PLN and Bakrie & Brothers had not signed any gas transportation agreement which regulated the toll fee for the gas.

“We don’t know yet whether $5.4 per mmbtu has included the toll fee or not,” he revealed.