Abstract

The continued national development in Indonesia has caused increasing energy demand. One energy source is natural gas, which is a clean, efficient alternative to fuel oil and coal. The Pagerungan Gas Field, currently under development is the first major gas development project targeted primarily to provide fuel gas to power generation stations necessary to meet the rapidly increasing energy demand in East Java.

On November 14, 1980, Pertamina and Atlantic Richfield Bali North, Inc. (ARBNI) entered into the Kangean Production Sharing Contract (PSC) for an area east of Java and Madura, and north of Bali. The current interests in the Kangean Block PSC are 54% for ARBNI, 36% for British Petroleum and 10% for P.T. Bimantara Duta Samudra.

In May, 1985 a potentially commercial accumulation of gas was discovered in the Kangean Block. Subsequent delineation in 1985 and 1986 confirmed the discovery of the Pagerungan Field. A third party appraisal estimated the Pagerungan proved recoverable gas reserves to be potentially commercial.

Extensive market studies carried out in 1985 showed the local market in the Surabaya - Gresik metropolitan area of East Java to be the most promising. Three customers where identified: PLN Java Timur, PGN - Surabaya and Petro Kimia - Gresik. Their combined expected demand for gas will be approximately 400 MMSCFD.

Development of the Pagerungan Gas Field is currently underway. A gas processing plant and associated facilities are being constructed on Pagerungan Besar Island. A 28" pipeline with a design capacity to deliver up to 600 MMSCFPD is being laid from Pagerungan to the Surabaya area, some 420 km away. Development drilling started in January, 1993. Sixteen wells will be drilled over the life of the field as needed to maintain the production capacity.