Indonesia’s state-owned Pertamina has signed an agreement with Andalas Energy and Power (ADL) pledging to tap stranded offshore natural gas fields, as the country tries to boost its energy supplies.
The aim is to “fast-track commercialisation” of these marginal fields, which already belong to Pertamina, Indonesia-focused Andalas said in a statement.
Under the terms of the agreement, the two companies will establish a joint working and steering committee, which will initially focus on identifying at least five stranded gas fields, the firm added. The five fields will be located in Pertamina’s acreage in Riau, Jambi and South Sumatra Provinces and will be suitable for sub 100-MW gas-to-power developments.
All of the target areas have an “abundance” of stranded gas fields that have already been identified, Andalas said.
Once the five fields have been identified the two companies will sign an exclusive joint development agreement to design, construct, fund and operate the gas-to-power developments, it added. They may also invite partners to join them at a later stage.
“Pertamina holds an unrivalled position and has in-depth knowledge of Indonesia’s oil and gas sector, as well as a substantial portfolio of stranded gas discoveries in South Sumatra where there is a major need for power,” Andalas’ CEO, David Whitby, said.
Pertamina is trying to boost energy supplies and attract upstream investment to meet increasing energy demand in Indonesia. Despite government efforts to inject energy into struggling production, regulatory uncertainty has deterred potential oil and gas investors in the last few decades. The poor reputation of Indonesia’s energy administration, which has been accused of corruption and is highly bureaucratic, has also been an obstacle.