Lack of Buyers, PHE and Medco Sell Gas to Kayan LNG

By Editorial Team 26/05/2020
Summary

PT Pertamina Hulu Energi (PHE) and PT Medco E&P Indonesia signed a gas sales and purchase agreement (PJBG) with PT Kayan LNG Nusantara on Wednesday (5/20). The deal allows the gas from the Simenggaris Block to go to the first mini LNG refinery in Indonesia, located in North Kalimantan. SKK Migas’ deputy for finance and monetization, Arief S. Handoko, said that the signing was a significant momentum for the oil and gas industry since, for the first time, PJBG in Indonesia is dealing with the downstream LNG business scheme.

According to the scheme, Kayan LNG will buy gas from the Pertamina-Medco E&P Simenggaris as the gas Joint Operating Body (JOB). Afterward, the gas from the Simenggaris Block in Nunukan, North Kalimantan, will flow into a mini LNG refinery. The refinery can now convert the gas into LNG, store it in ISO tank containers, and ship them directly to the buyers. With a total gas sales volume of 22 million cubic feet per day (MMSCFD), SKK projected that the gas distribution from the Simenggaris Block would begin at the end of December 2021.

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