Minister of EMR Ignasius Jonan and other government official - Photo by SKKMIgas

JAKARTA (TheInsiderStories) – Jambaran-Tiung Biru (JTB) field has started up its gas processing facilities (GPF) construction today, with anticipated production capacity of 330 million metric standard cubic feet per day (MMSCFD). The new field is expected to generate US$3.61 billion in revenue.

Chairman of the Special Taskforce for Upstream Oil and Gas Business Activities Amien Sunaryadi, said that JTB field is slated to be on-stream by early 2021 with contract period up to 2035. 100 MMSCFD of gas extracted will be sold to state electricity firm PT Perusahaan Listrik Negara (PLN) for $7.6 per million British thermal units (MMBTU) flat, with toll fee $0.9 per MMBTU to support the company’s operations in Gresik, East Java as well as Central Java.

Another 72 MMSCFD of gas from JTB field will be used to support industrial activities in Central Java and East Java.

“We estimate we can derive $3.61 billion in revenue from this field. In addition, this project will absorb more than 6,000 workers during construction. This is a commitment from the upstream oil and gas industry to fully support domestic consumption,” he said in a press statement on Monday (25/9).

Industry has been the biggest consumer of domestic pipeline gas, followed by power generation. Since 2013, domestic allocation has passed its export quota. In 2017, domestic gas contracts reached 3,855 MMSCFD, while exports marked 2,618 MMSCFD. “Almost 60 percent of gas production was absorbed by domestic firms,” he added.

The investment in this field reached $1.547 billion, excluding a 267-kilometer Gresik-Semarang pipeline development with an investment of $515 million.

The JTB field is jointly owned by several parties, including PT Pertamina EP Cepu, unit of PT Pertamina with a 45 percent interest while local government-owned enterprises hold 10 percent. United States oil producer ExxonMobil Corp. holds the remaining 45 percent share.

The Energy and Mineral Resources Ministry has mandated PEPC to take over ExxonMobil’s stake; ExxonMobil has set a price of $121 million for state-owned energy giant Pertamina to acquire its 45 percent participating interest.

Pertamina Cepu’s President Director Adriansyah, said that JTB will produce 330 MMSCFD through six global project service (GPS) fields. To distribute gas from JTB field, other unit of Pertamina, PT Pertamina Gas will build a transmission pipeline from Gresik to Semarang. This is expected to trigger more gas-based industrial activities along the pipeline, that will pass through seven regencies in Central and East Java.

“JTB is gathering or unitizing its working field Cepu andPertamina EP. This field has 1.9 trillion cubic feet in estimated reserves. Pertamina Cepu will become a single operator when they acquire the ExxonMobil share in JTB, so that Pertamina will hold 90 percent participating interest and the remaining 10 percent will be possessed by local government,” he said.

Pertamina Ceput is appointed as Unitary Gas Field Operator JTB since Mobil Cepu Limited and Pertamina EP signed the Head of Agreement (HoA) on Unitization of JTB field on August 17, 2011. Later, on Fe. 13, 2013, they signed an integrated plan of development on JTB gas field development and Cendana field, which was revised later, on August 17, 2015. Later, on August 8, 2017, Pertamina and PLN signed a HoA on JTB gas supply for the Gresik area.

Indonesia has produced 1.22 million MMSCFD gas to date, according to data from the task force. The biggest gas producer is ORF SAKRA field, operated by PT Medco E&P Natuna with production capacity of 377 thousand MMSCFD or about 31 percent, followed by GMS ConocoPhillips Grissik operated by ConocoPhillips Ltd with production capacity of 103 thousand MMSCFD or about 8.4 percent, as well as PT Donggi Senoro LNG, operated by Pertamina and Medco Tomori Sulawesi LTD with production capacity 61 thousand MMSCFD or 5 percent.

Indonesia is expected to suffer a gas deficit in the next five years, due to limited gas reserves. Having said that, domestic consumption has risen sharply, by 170 percent, from 1,480 BBTU in 2013 to 3,997 BBTU in 2016. Meanwhile, Indonesian gas exports declined by 34.9 percent, from 4,397 BBTU in 2003 to 2,860 BBTU in 2016.

Writing by Yosi Winosa, Email: yosi.winosa@theinsiderstories.com