The mini refinery owned by PT Kayan LNG Nusantara in Tana Lia Sub-district of Tana Tidung District will receive 22 million standard cubic feet of gas per day (MMSCFD).
Deputy of Finance and Monetization of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Arief S. Handoko noted in a statement here on Thursday that SKK Migas and the contract-sharing contractor will prioritize domestic gas demand.
"The gas sales purchase agreement will generate additional revenue for the state in the event of huge budget requirement for handling the COVID-19 pandemic," Handoko remarked.
The agreement was signed during a virtual ceremony on Wednesday (May 20) by President Director of PT PHE Simenggaris Afif Saipudin, President Director of PT Medco E&P Simenggaris Ronald Gunawan, and Director of PT Kayan LNG Nusantara Antony Lesmana.
Handoko remarked that PHE-Medco will supply 22 MMSCFD of gas, with channeling expected to commence in late December of 2021.
"We hope that the agreement would meet the domestic demand for electricity and industry, as well as other needs," Director of PT Kayan LNG Nusantara Antony Lesmana stated.
North Kalimantan Governor Irianto Lambrie affirmed that the agreement was projected to have a multiplier effect on the local economy in Tana Tidung District and Nunukan District, as well as in other regions in North Kalimantan.
The Mini-LNG refinery in Simenggaris is expected to become a hub for development of other gas fields in North Kalimantan.
The LNG storage technology in Simenggaris is projected to become a pioneer for virtual pipelines for natural gas distribution to meet demand on a small scale in Indonesia's remote islands.
Meanwhile, General Manager of JOB Pertamin_Medco E7P Simenggaris Budi Prabowo stated that the sales purchase agreement has become a pioneer in gas field monetization in Indonesia, especially small-sized fields and in remote areas, including in Simenggaris.
It was the third signing of the gas sales purchase agreement. The first agreement was inked with PT PLN East Kalimantan to supply 500 thousand cubic feet of gas per day for electricity production in Tana Tidung District.
The second agreement was inked with PT PLN (Persero) to supply 8 MMSCFD of natural gas to meet the electricity demand in North Kalimantan.
Under these agreements, the Simenggaris block will supply 30 MMSCFD to its partners for the domestic and export market. Related news: PGN to supply LNG for 3,000 logistics trucks
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Translator: Rusman, Sri Haryati
Editor: Rahmad Nasution
Copyright © ANTARA 2020
