Feasibility Study for Dumai Sei Mangkei Pipeline Review

 

The government will complete the connection of the gas pipeline network that will connect Sumatra and Java, one of which is the Sei Mangkei-Dumai Pipe. However, the feasibility study / FS of this project needs to be readjusted to the current situation because it has been prepared since 2014.

Director of Planning and Development of Oil and Gas Infrastructure at the Ministry of Energy and Mineral Resources (ESDM) Alimuddin Baso explained, based on the FS, the pipe was designed to be between 12-28 inches in diameter and the investment cost was estimated at the US $ 483 million. 

    The study has not yet determined the funding scheme that will be used. However, there are two alternatives, namely using state funds such as state investment (PMN), or Public-Private Partnership (PPP).

"PT PGN Tbk has made a feasibility study since 2014 and with the development of these 6 years, it needs to be reviewed again. That must be the main consideration, "he said.

His party is worried that if there is no review, many points that will be connected will be neglected. He explained that the Sei Mangkei-Dumai Pipe was needed to maintain the reliability of the gas supply in North Sumatera and Riau. Currently, the gas supply in the area comes from Grissik and Jambi through the Grissik-Duri-Dumai Pipeline, as well as the Arun LNG Terminal, Block A, NSO / NSB Block via the Arun-Belawan-Sei Mangkei Pipeline.

"In addition, it also encourages the growth of new industrial estates along the Sei Mangkei-Dumai gas pipeline," added Ali.

Referring to the National Gas Balance, Aceh and Northern Sumatra regions obtain gas from Block A, NSO, and NSB, as well as Tangguh LNG. In addition, several projects will begin production, namely Lhokseumawe Block and Gebang Block in 2023, and ENI Jau in 2024. 

ENI

    Meanwhile, the main consumers of gas are PT Pupuk Iskandar Muda (PIM) and electricity. Unfortunately, until now there is no certainty regarding gas demand for the retail industry along with the Sei Mangkei-Dumai Pipe.

"This is an empirical condition and must be observed so that when deciding which scheme to use, it must be prudent. We want something that is decided on that will be executable, not planned. So it is important to discuss it carefully, "said Ali.

However, this pipe can also be used to supply gas to other areas such as Labuhan Baru, Asahan, and Medan, as well as power plants in North Sumatra. The Sei Mangkei-Dumai pipeline is one of three gas transmission pipeline projects proposed by the Ministry of Energy and Mineral Resources which was approved as a National Strategic Project (PSN) which will be revised after the Covid-19 pandemic has passed. 

    The other two transmission pipeline projects are the Cirebon-Semarang Pipe and the West Natuna Transportation System (WNTS)-Pemping Island Pipeline. 

Investor Daily, Page-10, Tuesday, Nov 17, 2020

Eni Strong Candidates to Manage IDD Block

The Special Task Force for Upstream Oil and Gas (SKK Migas) said that the transition to management of the deep-sea gas project or Indonesia Deep Water Development (IDD) is entering its final stage. 

Chevron Pacific Indonesia

    SKK Migas confirmed that the transfer of IDD Block management from Chevron Pacific Indonesia to Eni, who is also one of the IDD Block owners, will take place on a business-to-business (B to B) basis and can be completed by the end of this year. 

    Head of SKK Migas, Dwi Soetjipto, confirmed that currently, the discussion of switching the IDD Block operator has entered the final stage.

Dwi Soetjipto

"Eni is a candidate to replace Chevron. Being finalized, God willing, at the end of this year we are targeting a clean "Dwi said at the Ministry of Energy and Mineral Resources.

The finalization is internal between Chevron and Eni. After it was confirmed that it would not continue the management of the Rokan Block, Chevron Pacific Indonesia also decided not to continue the phase II development of the IDD Block.

One of the reasons for Chevron's reluctance to continue with the gas project was that the second phase development of the IDD Block was not included in the global portfolio of the US oil and gas company. 

the IDD Block

    Currently, the IDD project consortium consists of 62% ownership of Chevron, the remaining 20% ​​is held by Eni and 18% by Sinopec. Eni is considered to be a strong candidate to continue the development of phase II of IDD because investment costs can potentially be reduced. This is because this Italian oil and gas company already has facilities that can be integrated.

Sonitha Poernomo

Previously, PT Chevron Pacific Indonesia's Corporate Communication Manager, Sonitha Poernomo, said that the transition discussion process was still ongoing.

Blogger Agus Purnomo in SKK Migas

"We are still working with SKK Migas and potential partners to help realize the potential of this project. However, according to policy, we cannot provide detailed information about commercial negotiations," She said.

Kontan, Page-10, Saturday, Nov 7, 2020

Change of ownership of IDD projects must be completed this year

 

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the change in ownership of Participating Shares (participating interest / PI) for the Indonesia Deepwater Development (IDD) project must be completed this year. Otherwise, the deep-sea gas project will not start immediately.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said that Chevron Indonesia as the operator of the IDD Project is still looking for an oil and gas company to work on the project. If indeed there will be a change in PI ownership, his party emphasizes that it can be completed this year. Because if it takes too long the IDD project may not be developed immediately.

“Actually, the real timeline [change of PI owner] depends on the deal. But I want to be this year. If it doesn't start immediately, the project won't take place, ”he said.

the IDD project  by Chevron

According to him, the urgency of completing the change in shareholders in the IDD Project is different from the Abadi LNG Project, the Masela Block. 

the Masela Block.

    This is because until now, the revised Plan of Development / PoD for the IDD project has not yet been completed. So that if the change of PI owner is not completed immediately, the project cannot operate.

ENI

Regarding the opportunity for ENI to replace Chevron, Dwi explained that the Italian oil and gas company currently also holds shares in the IDD Project. Not only that, but ENI also manages two oil and gas projects which are located adjacent to the Chevron project. Even ENI already has production facilities because the project has been operating since 2017.

Chevron

"Apart from the agreement between the two parties, ENI has a good positioning to be able to develop the IDD project. ENI has facilities and can be integrated, and if possible, the investment can be reduced so that the economy is better, "he explained.

However, the government is not in a position to suggest who will replace Chevron in the IDD Project. The government will look at who will enter and consider the experiences of oil and gas companies wishing to enter the gas project in the Makassar Strait.

"So our consideration is for this project to start, be able to produce, and become the supporting capacity to achieve the target of 1 million barrels per day (bpd)," said Dwi.

On the other hand, he said the government supports the extension of the Production Sharing Contract / PSC block of oil and gas that is included in the IDD Project, namely the Meeting oil and gas block and the Ganal oil and gas block. 

    This is because the Rapak oil and gas block contract will expire in 2027 and the Ganal oil and gas block will be completed in 2028. Without the extension, he admits that oil and gas companies will find it difficult to develop the IDD project.

"Although later asking for approval from the government regarding the extension of the PSC. But the government will support the extension if the contractor is serious about carrying out the project, "he said.

In the IDD Project, Chevron is the operator and majority shareholder of 63%. Chevron is working on this deep-sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau.

Referring to SKK Migas data, until last June, the IDD Project was still in the process of evaluating the approval of the POD revision. In addition, this project is still in the process of evaluating the proposed extension of the Rapak and Ganal Block PSCs.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, this project is targeted to reach a peak gas production of 844 million standard cubic feet per day / MMscfd and 27 thousand BPD of oil. The US $ 6.98 billion projects is planned to start operating in the fourth quarter of 2025.

Investor Daily, Page-10, Tuesday, August 11, 2020

ENI has the potential to replace Chevron in working on the IDD project

 

The Ministry of Energy and Mineral Resources (ESDM) said Chevron Indonesia would withdraw from the Indonesia Deepwater Development (IDD) Project. The oil and gas company from the United States is offering management rights to ENI.

the Indonesia Deepwater Development (IDD) By Chevron

The Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial, said that Chevron is interested in working on the IDD project because it is still managing the Rokan Block. Once the management rights were transferred after the production sharing contract / PSC for the Rokan Block ended, Chevron also intended to withdraw from the IDD project.

"Chevron is an IDD package with Rokan. If Chevron leaves the Rokan block, that means Chevron is also out of the IDD project, ”he said.

Chevron is currently still looking for a replacement who will work on the IDD project. One of the candidates being offered by Chevron is an Italian oil and gas company, ENI.

"Now offered by ENI, I think so. The point is they are offering themselves to each other, which I know Chevron is offering. We'll just wait, "explained Ego.

Regarding Eni, the oil and gas company recently signed a contract with the government for the West Ganal Block. This block was previously part of the Makassar Strait Block, which contains the West Seno Field which has been developed by Chevron. Eni also manages the Muara Bakau and East Sepinggan Blocks which are located near the IDD Project.

the Muara Bakau and East Sepinggan Blocks

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that his party is still waiting for a report from Chevron regarding the follow-up of the IDD Project. His party has even been chasing the oil and gas company from the United States to immediately make a decision whether to continue this project or not.

Dwi Soetjipto

"The letter from SKK Migas has not been replied to. We are still discussing it. We'll just wait, "he said.

In the IDD Project, Chevron is the operator and majority shareholder of 63%. Chevron is working on this deep-sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau. 

SKK MIGAS

      Referring to SKK Migas data, until last June, the IDD Project was still in the process of evaluating the approval of the plan of development / POD revision. In addition, this project is still in the process of evaluating the proposed extension of the Rapak and Ganal Block PSCs.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, this project is targeted to reach a peak gas production of 844 million cubic feet per day (million standard cubic feet per day / MMscfd) and 27 thousand barrels of oil per day (bpd).

     The US $ 6.98 billion projects are planned to start operating in the fourth quarter of 2025. If Chevron releases the IDD project, there will be no more oil and gas projects in Indonesia that the oil and gas company will undertake. 

        The reason is, the management of the Rokan Block has been decided to be transferred to PT Pertamina (Persero) starting in 2021. However, Ego said, this does not mean Chevron will leave Indonesia.

"We don't know, later in the middle, there could be a project," he said.

PT Chevron Pacific Indonesia (CPI)

PT Chevron Pacific Indonesia (CPI) Corporate Communication Manager Sonitha Poernomo said, although the Kutei Basin is an attractive hydrocarbon area, the IDD Project cannot compete for capital in Chevron's global portfolio.

Sonitha Poernomo

Chevron Rapak Ltd (CRL) opened a data room to facilitate discussions on identifying potential partners for the project earlier this year. According to company policy, it was unable to provide detailed information on commercial negotiations. However, his party will continue to work with SKK Migas and potential partners to help realize the potential development of the IDD Project.

"We believe this project will have value for other operators and the Kutei Basin can continue to be developed safely," said Sonitha Poernomo.

 Investor Daily, Page-10, Friday, August 7, 2020

Chevron sells IDD blocks

 

PT Chevron Pacific Indonesia's plan to exit the second phase of the development of the second phase of the Indonesia Deepwater Development (| DD) Block is very serious. Chevron has even offered the deep-sea gas block to its partner, Eni, an Italian oil and gas company.

the Indonesia Deepwater Development (| DD) Block

Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources Ego Syahrial confirmed the news that Chevron was offering to develop the block to Eni.

"Chevron has already proclaimed it, now it is being offered to Eni, we'll just wait. Chevron is the one making the bid to Eni," he explained.

However, Ego was reluctant to reveal what the block release scheme would be like and the bid value. Currently, in the Deep Sea project, Chevron acts as the operator and the majority shareholder, which is 63%.

Chevron is working on this oil and gas project in Iaut with other partners, namely Eni, Tip Top, PT Pertamina Hulu Energi, and partners in Muara Bakau. IDD is a deep-sea gas project carried out by Chevron Indonesia Company (Cico) in the Kutai Basin, East Kalimantan through four production sharing contracts, namely PSC Ganal, Rapak, Makassar Strait and Muara Bakau.

The second phase development in the IDD Block includes the development of the Gendalo field and the Gehem field. There are plans to develop two separate hubs where Gendalo and Gehem will have a Floating Production Unit (FPU) for each field (see table). 

    Ego assessed that Chevron's plan to leave the IDD Block was inseparable from Chevron's not being extended to other oil and gas blocks in Indonesia, namely the Rokan Block. Later, in the year 2021. PT Pertamina (Persero) will continue the block located in Riau. "so one package," he said.

Dwi Soetjipto

Meanwhile, Dwi Soetjipto, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), said that his party had asked Chevron's assurance for the continued management of the IDD Block. However, until now the letter sent by SKK Migas to Chevron has not been immediately responded to.

"Not yet replied, we are still discussing it," he said.

SKK Migas needs to be certain about the current condition of the IDD Block. This is because there are already oil and gas companies that are interested in continuing the project. Chevron also has not yet sent the IDD Block management work plan or plan of development (PoD), which has been requested since January 2020. 

Sonitha Poernomo

    Manager of Corporate Communications of PT Chevron Pacific Indonesia, Sonitha Poernomo said that his party had opened a data room to facilitate discussions on identifying potential partners for IDD Block earlier this year.

"At this time, there is no final decision regarding the discussion," She said.

Regarding the plan to leave the IDD Phase 2 project, Sonitha explained that his party could not compete for capital in the global Chevron Group portfolio. Therefore, he believes this project will have value for other operators.

"We will continue to work closely with SKK Migas and potential partners to help realize the potential of this project. However, according to policy, we cannot provide detailed information about commercial negotiations, "She said.

Kontan, Page-12, Friday, August 7, 2020

Global Investors Get Out of the Jumbo Oil and Gas Project

The future of energy investment in the country is threatened to fade. One by one foreign investors send signals that they will leave the jumbo oil and gas project in Indonesia. The latest news is that PT Chevron Pacific Indonesia is unlikely to continue the development of the Phase II Indonesia Deepwater Development (IDD) project in the Kutai Basin in Kalimantan Tmur.

PT Chevron Pacific Indonesia

The oil and gas company from the United States claimed to have no capital to develop the Phase II IDD project. This is because the IDD project is not a priority and is not included in the global Chevron Group portfolio.

the Phase II IDD project

Corporate Communication Manager of PT Chevron Pacific Indonesia, Sonitha Poernomo, revealed that the Phase II IDD project could not compete for capital in Chevron's global portfolio. Therefore, Chevron is ready to exit the US $ 5 billion project.

Sonitha Poernomo

"We believe this project will have value for other operators," said Sonitha Poernomo.

IDD is a deep sea gas project developed by Chevron Indonesia Company (Cico) through four production sharing contracts, namely PSC Ganal, Rapak, Makassar Strait and Muara Bakau. There are five gas fields ready to be developed, namely Bangka Field, Gehem, Gendalo, Maha and Gandang.

the Masela Block

Chevron's intention to leave the energy project adds to the list of foreign investors with plans to leave. Not long ago, Royal Dutch Shell (Shell) planned to sell Participating Interest (PI) at 35% in the Masela Block. The investment value of the gas block is around US $ 19.8 billion.

Royal Dutch Shell (Shell) 

Another foreign investor who wants to leave is Japan's Mitsui Corp. They plan to leave the Paiton power plant project, East Java. Mitsui holds 45.59 shares in the 2,045 MW power plant. Regarding the potential of the IDD project, Soenitha said, in fact the Kutai Basin was still an attractive hydrocarbon area. 

       Therefore, Chevron is confident that other operators can continue to develop. Until now, Chevron along with the government and potential partner partners have continued to establish communication to find solutions for the development of the IDD Block.

Eni

In this project, Chevron is the operator and majority shareholder of 63%. The remaining Eni, Tip Top, PT Pertamina Hulu Energi and Muara Bakau partners. Development of IDD Phase II includes the Gendalo-Gehem Field. Both fields will each have a floating production unit. 

     Discussion on Chevron's plan to leave the IDD Block has been busy since the beginning of this year. The signal is visible from Chevron's attitude of reluctance to provide a revised report on the IDD Block's development plan.

SKK Migas has not yet received certainty. Even though there are already several potential investors who have the potential to replace Chevron in the jumbo gas project. Acting Head of the SKK Migas Program and Communication Division, Susana Kurniasih, is still waiting for Chevron's official information. SKK Migas has written to Chevron related to the request for an explanation of Chevron's interest in phase II.

"The letter has been sent this week, so it takes time to wait for the answer," explained Susana Kurniasih, who was a former Voice Update Update journalist.

Dwi Soetjipto

The Head of SKK Migas, Dwi Soetjipto, explained that his party had continued to urge Chevron about the certainty of the continued management of IDD.

"We are still waiting for the Chevron report. Of course this should not be protracted," said Susana Kurniasih.

Hulu Migas practitioner, Tumbur Parlindungan assesses that there are several possibilities that make Chevron out of the IDD project. First, global conditions. Second, the problem of the transfer of management of the Rokan Block from Chevron to Pertamina. Third, the oil and gas investment climate in Indonesia might be considered unattractive for Chevron.

Kontan, Page-1, Friday, July 24, 2020

SKK Migas Urges Chevron to Immediately Decide on the Fate of the IDD Project

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) urged Chevron Indonesia to immediately ensure the continuation of the .

SKK Migas Head Dwi Soetjipto revealed that his party was still waiting for a report from Chevron regarding the follow up of the IDD Project. He said he had even pursued an oil and gas company from the United States to rush to make a decision whether to continue this project or not.

"So our position is waiting for a report from Chevron. Of course, this should not be protracted, and we have urged Chevron, "he said.

It understands that after the Covid-19 pandemic and low oil prices, many planned activities must be reviewed by oil and gas companies. The current condition has an impact on all major oil and gas projects in the world. As a result, Chevron's follow-up on the IDD Project has been hampered.

    However, it urged Chevron to immediately report its plans related to the IDD Project. Moreover, Chevron is not the only oil and gas company interested in working on the deep-sea gas project in the Makassar Strait.

"Actually there are other parties who are also interested in this matter [IDD Project]. But of course, we are waiting for the official report from Chevron first, "said Dwi.

Referring to SKK Migas data, as of last June, the IDD Project is still in the process of evaluating the approval of the revised development plan (POD). In addition, the project is also still in the process of evaluating the proposed production sharing contract (PSC) for the Rapak Oil and Gas Block and Ganal Oil and Gas Block.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, the project is targeted to reach peak gas production of 844 million cubic feet per day / MMscfd and 27 thousand barrels of oil per day (BPD). The US $ 6.98 billion projects are planned to start operating in the fourth quarter of 2025.

In fact, the Rapak Block contract will expire in 2027, while the Ganal Block in 2028. In addition, Deputy Head of SKK Migas Fatar Yani Abdurrahman had revealed, there was a change in the design of the IDD project, namely the production platform was moved to shallow water. Therefore, POD changes are needed.

    In the IDD Project, Chevron is the operator and majority shareholder of 63%. Chevron is working on this deep-sea oil and gas project along with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and Muara Bakau partners.

Investor Daily, Page-9, Saturday, July 18, 2020

SKK Migas Seeks 12 Oil and Gas Projects This Year is Not Delayed

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) seeks to prevent 12 oil and gas projects scheduled to start production this year due to the widespread of the Corona Virus.

Dwi Soetjipto

SKK Migas Head Dwi Soetjipto said that the Covid-19 pandemic, which was followed by a call for the community to remain at home, made the oil and gas operational schedule for the project shifted from the plan. From his observation, there is one oil and gas project which has the potential to be delayed from this year's operation to next year.

"But we are trying to minimize the shift. We will inform you more fully in mid-April, "he said.

SKK Migas

SKK Migas Deputy for Operations Julius Wiratno added that the oil and gas project development has the potential to be disrupted due to a change in crew and logistics supply. Nevertheless, he will continue to conduct intensive coordination to mitigate and carry out recovery plans for the oil and gas project. In fact, several projects he said had been operating.

Blogger Agus Purnomo in SKK Migas

"Of the 12 projects in 2020, there are already four projects that are on stream (starting operations), all according to schedule. Hopefully, everything can run smoothly, "he said.

Of these four projects, three are scheduled to be operational in the first quarter of 2020, namely the Grati Pressure Lowering Project with a capacity of 30 million cubic feet per day / mmscfd by Ophir Indonesia (Sampang) Pty Ltd, Buntal-5 45 mmscfd by Medco E&P Natuna Ltd, and Sembakung Power Plant by PT Pertamina EP.

While one more project was completed earlier than planned in the second quarter, the Randu Scissors Project with an estimated production of 3 mmscfd by PT Pertamina Hulu Energi Randu Gunting. In addition, there are eight other projects planned to operate this year.

Blogger Agus Purnomo in Petronas Carigali Ketapang

In the first quarter, Bukit Tua Phase-3 with an estimated production of 31.5 mmscfd by Petronas Carigali Ketapang II Ltd is planned to start operations. Furthermore, three projects will operate in the second quarter, namely 15 mmscfd Betung Compressors by PT Pertamina EP, Malacca Strait Phase-1 3,000 bpd by EMP Malacca Strait, and Meliwis 20 mmscfd by Ophir Indonesia (Madura Offshore) Pty Ltd.

In the third quarter of 2020, there were three oil and gas projects scheduled to operate. These three projects are the 2.4 mmscfd Beauty Project by PT Sele Raya Belida, the 150 mmscfd LP-MP Compressor by PT Pertamina EP, and Peciko 8A 8 mmscfd by PT Pertamina Hulu Mahakam. Finally, the Merakes Project by ENI Indonesia is scheduled to begin production in the fourth quarter of 2020. 

ENI

At the Merakes Field, ENI plans to drill six subsea wells and build an underwater pipeline system that will be connected to the floating cricket production facilities / Jangkrik FPU in Muara Bakau Block. The peak production of the Merakes Field is estimated to reach 60,305 barrels of oil equivalent per day / boepd.

the Merakes Field

In 2020, the national oil and gas lifting is set at 1.95 million barrels of oil equivalent per day / boepd, up slightly from last year's realization of 1.8 million boepd. Specifically, oil production rose to 755 thousand BPD from the realization of 746 thousand BPD, and gas to 1.19 million boepd from the realization of 1.06 million boepd.

Investor Daily, Page-9, Friday, March 27, 2020