The Government of Indonesia agrees to develop East Natuna.
Finally, the news that people have been waiting for: The development of East Natuna is definitely good news for the oil and gas industry in Indonesia that experienced moderate decline in the last couple years. Additional supply from East Natuna will be a new power for Indonesia to fulfill the rising domestic demand while maintaining its position as one of the largest gas exporters in the world, particularly for LNG. Even though East Natuna contains more than 70% CO2 and also high Sulfur, this block has about 46 trillion cubic feet (TCF) of reserves, almost one third of the current total of Indonesia’ reserves.
Furthermore, this news is good not just for Indonesia, but something that neighboring countries grouped under ASEAN are waiting for as well.
Through the ASEAN Council on Petroleum (ASCOPE) – the association of ASEAN Nations oil companies – ASEAN launched the “Trans-ASEAN Gas Pipeline Infrastructure Project”. This project was based on an evolutionary process of stepwise integration of the “National Gas Pipeline Infrastructure Project” amongst Member Countries. Under the first Trans-ASEAN Gas Pipeline (TAGP) Masterplan, which was issued in 2000, ASEAN emphasized that the future main gas hub for the region would be the gas from Indonesia’s Natuna Field. Under the assumption that the East Natuna development will commence as scheduled with gas production, ASEAN forsees the supply of gas in the region will be provided indigenously – no gas import from outside the region – at least until 2020.
Getting the Trans-ASEAN Gas Pipeline (TAGP) projects implemented is very important for ASEAN to help ensure greater energy security. The countries with abundant gas reserves could supply the deficit countries in the region at low cost under the spirit of regional cooperation. Since the first pipeline project was installed in 1991, several cross-border pipelines have been constructed and some others are in planning stages. Currently there are 11 cross-border gas pipelines in operation with a total gas pipeline length of 3,019 km. The 12th cross-border gas pipeline, a new 150 km pipeline connection from Indonesia to Thailand, will be in operation in 2013. Although only about 45% (3,169 km) of total TAGP pipeline connections will be in operation by 2015, these pipelines have formed the TAGP backbones in the eastern part of ASEAN. In 2015, it will be possible to transmit gas from Indonesia to Viet Nam or even to Indonesia. It will also be possible for Singapore to export gas from its Liquefied Natural Gas (LNG) terminal to Thailand through the existing gas pipeline connection.
(The Energy Collective, August 20, 2013)