“We’ll conduct an audit to see whether the development cost can be reduced, including in the procurement of its production facilities,” SKKMigas deputy for operation control Fatar Yani Abdurrahman said in Jakarta recently.

The JTB field is located within the Cepu block, which is jointly owned and operated by several parties, including PT Pertamina EP Cepu (PEPC) with 45 percent interest and local government-owned enterprises with 10 percent interest.

“At present, we’re still stuck in the monetization process because the field’s development is too costly, resulting in a gas price of 11 dollar per mmbtu [million British thermal unit]. It doesn’t make sense,” Fatar said, adding that any figure below that would be uneconomical.

The JTB field, initially slated to be on stream in 2020, will produce an estimated 172 million standard cubic feet per day (mmscfd) of gas, 100 mmscfd of which is set to be bought by state electricity firm PLN for its power plant in Gresik, East Java.

However, there has been a deadlock over the gas price, as PLN is only willing to pay $7 per mmbtu for the gas at its plant gate in Gresik, while PEPC wants the price of $7 per mmbtu at its wellhead in the JTB field. (ags)

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