Indonesia to double producing gas fields by 2006

Indonesia expects to double the number of producing gas fields to four by the year 2006 to help meet supply contracts amid domestic security concerns, energy and mineral resources minister Purnomo Yusgiantoro said. "I would like to see that Indonesia has, for 25 years to come, two others (gas fields) at least," he told an international energy conference.
The two new fields slated for development -- one of which is BP's Tangguh, off the coast of West Papua -- will boost existing supply capacity from the Bontang and Arun gas fields. Tangguh is scheduled to deliver its first LNG shipments by 2005-06. The government is also counting on further gas reserves becoming available as it opens up more exploration areas. "We are now opening up 15-20 blocks for bids, and I believe some of those blocks contain gas reserves," Yusgiantoro said.

Indonesia has natural gas reserves of 166 tcf, the majority of which is proven. The government is under pressure to find alternative gas reserves to tap the growing demand for natural gas as a source of energy, particularly power generation, and to meet supply agreements from ExxonMobil's Arun gas field in North Sumatra.
The Arun field is expected to run out of reserves by 2005-06, well before the expiry of many of its contracts, according to an industry observer at the conference. In addition, its ability to fulfil customer orders has been thwarted by security problems.

Yusgiantoro admitted there have been some "little problems" owing to the socio-political situation in Aceh. He said the importance of having alternative supply sources was evident earlier this year when ExxonMobil had to shut its plant after being caught up in the fight between government military forces and local independence supporters. At the time, Indonesia sourced gas from the Bontang plant in East Kalimantan to help meet the shortfall in supply.
"We are going to continue respecting our contracts," Yusgiantoro said. "This is one of our strong factors in maintaining our position as the preferred energy supplier."

Indonesia currently exports 27 mm tpy of LNG, mainly to Japan, South Korea and Taiwan.