Indonesia’s state-owned Pertamina has shipped its first cargo of LNG from the Sanga-Sanga block in East Kalimantan.
The shipment follows Pertamina Hulu Sanga-Sanga’s (PHSS) replacement of Virginia Indonesia Co. (VICO) as Sanga-Sanga’s operator on October 30. VICO had operated the block for more than four decades under the PSC model, which was replaced by the gross-split sharing mechanism when PHSS assumed control.
Without disclosing the volume of LNG shipped, PHSS director Andi Wisnu praised shareholders for their commitment to the speedy production, commercialisation and monetisation of the block.
“We appreciate [the efforts of] all that were involved, starting from the preparation and processing to the LNG shipment from the Badak LNG refinery, which is operated by Badak NGL in Bontang, East Kalimantan,” The Jakarta Post quoted him as saying last week.
Sanga-Sanga, which is located in the Kutai Kertanegara Regency of East Kalimantan, currently produces around 16,000 boepd of liquids and 70 mmcf (1.98 mcm) per day of gas. The block’s remaining recoverable reserves is estimated at 258 million boe.
East Kalimantan is one of the country’s most important oil and gas producing regions. According to SKK Migas, blocks in this area contribute around 35% of Indonesia’s oil and gas output.
Depending on oilfield conditions, the government is hoping that Pertamina can curb declining production at Sanga-Sanga. The company has budgeted for two wells in 2018 and a further 29 in 2019. Pertamina has committed US$237 million to the development of the block for the first three years of its production lifecycle.
The block is home to seven gas fields: Badak, Nilam, Pemaguan, Semberah, Mutiara, Beras and Lempake. The Jakarta Post previously quoted Energy and Mineral Resources Minister Ignasius Jonan as saying that Sanga-Sanga was one of 12 blocks awarded to Pertamina as compensation for the state company’s commitment to subsidising fuel prices.