Conoco announced Indonesian state oil company Pertamina and Malaysian state oil company Petronas have signed final agreements for the long-term delivery of natural gas to Malaysia by pipeline from Conoco-operated South Natuna Sea Block B fields offshore Indonesia.
These agreements formally complete the intent established under a Heads-of-Agreement signed between these two national companies on Oct. 5, 2000.
Under the contract, Petronas will purchase 1.5 trillion cubic feet of natural gas, valued at approximately US$4 billion, over the next 20 years.
Additionally, more than US$4 billion in oil and natural gas liquids will be produced from Block B along with this gas.
The gas will be supplied from Indonesia's South Natuna Sea Block B, which is operated under a production sharing contract (PSC) between the Indonesian government and the co-venturers Conoco Indonesia Inc. Ltd. (40 percent), Inpex (35 percent) and Texaco (25 percent).
This is the second gas sales agreement relating to Natuna Sea Block B and it involves a US$2.5 billion direct investment by the PSC in field facilities, wells and the installation of a 60-mile pipeline from the newly constructed Hang Tuah moveable offshore gas production unit (MOgPU) to Petronas' Duyong Complex offshore Malaysia.
Inaugurated last week in Ulsan, Korea, the Hang Tuah MOgPU will be on stream in Indonesia's Block B by mid-year 2001.
Additionally, a floating, production, storage and offtake, or FPSO, system and liquefied petroleum gas (LPG) facility are being constructed to support the production of more than 170 million barrels of oil and close to 100 million barrels of LPG.
The delivery of gas in support of the Petronas sales agreement is slated for August 2002 at the rate of 100 million cubic feet per day (mmcfd), and then will ramp up with a plateau rate of 250 mmcfd, which likely will be reached by 2007. The gas will be primarily used to fuel new power generation in Malaysia.
© 2001 Mena Report (www.menareport.com)