ConocoPhillips Gas Supply to PLN Delayed by PGN

Oil and gas regulator SKK Migas has discovered some changes in the development of the Corridor Block. One reason for these changes is the delayed delivery of gas from the oil and gas block located in South Sumatra to state electricity firm PLN.

Data from SKK Migas presented at a meeting with the Energy Commission of the House of Representatives (DPR) revealed that the delay was due the supplier requiring permission from state gas company PGN to deliver gas to PLN. (Read: Gas Portion for Power Plants Increase to 25 Percent)

Head of the Fuel and Gas Procurement Division at PLN, Chairani Rachmatullah, did not deny that this was a problem. The ConocoPhillips (Grissik) delivery of 40 bbutd of gas was delayed because its agreement with Transportasi Gas Indonesia had not been finalised.

Transportasi Gas needed the permission of its shareholders before it could supply the gas. One of its shareholders is PGN. However, PGN did not give the go ahead because it needed to calculate the remaining capacity of the Transportasi Gas pipeline, particularly as PGN also had plans to use the same pipeline.

Now, Chairani continued, the problem has been resolved after an agreement to supply gas was signed last week. However, the gas has not been delivered yet. “Delivery of the gas will start on 1 July 2016,” he told Katadata last Friday (10/6). (Read: Gas Supply Stops, PLN Holds Alternate Blackouts in Aceh)

Meanwhile, PGN’s Director of Investment Planning and Risk Management M. Wahid Sutopo, has been unavailable for confirmation. ConocoPhillips has also been unavailable for comment on the impact this delay has had on the company’s lifting target. ConocoPhillips’ Vice President of Development and Relations Joang Laksanto has not answered telephone calls or text messages from Katadata.

Between January and May 2016, ConocoPhillips (Grissik) had lifted 827 mmscfd of gas, falling short of the target of 843 mmscfd set in the 2016 state budget. Despite this, SKK Migas plans to hike the company’s lifting target in the revised 2016 state budget to 857 mmscfd. (Read: Government Slashes Oil Lifting Targets of Five Contractors)

Meanwhile, the government has lowered the national gas lifting target from 6,470 mmscfd to 6,244 mmscfd because the lifting targets of six contractors have been reduced.

Pertamina EP’s lifting target has been lowered across all its working areas in Indonesia. The Pertamina subsidiary is expected to acheive722 mmscfd, against an initial target of 858 mmscfd.

The lifting target for ConocoPhillips Indonesia in the South Natuna Sea Block B was also lowered by 22 percent to 190 mmscfd. Meanwhile, VICO’s lifting target for the Sanga-Sanga Block was reduced to 185 mmscfd. (Read: SKK Migas: VICO Scraps Plan to Drill 40 New Wells)

Petronas Carigali Muriah’s lifting target in the Muriah Block has been lowered from 108 mmscfd to 106 mmsfcd, the target for Talsman Jambi Merang – JOB in the Jambi Merang Block was also lowered to 95 mmscfd, and the target for Energy Equity Epic (Sengkang) in the Sengkang Block has been lowered to just 78 mmsfcd from the initial target of 83 mmsfcd.