Kangean Oil and Gas development gets $300-million boost

Offshore staff

TOKYO -- Kangean Finance Co., the Japan Bank for International Cooperation (JBIC), the international wing of the Japan Finance Corp., and the Bank of Tokyo-Mitsubishi UFJ (BTMU) have signed a $300-million syndicated credit facility for the Kangean Oil and Gas development project.

JBIC provides a credit facility of $180 million to the project, while BTMU provides a remaining facility of $120 million. The funds from this facility will be used for several development projects in the Kangean PSC. Natural gas from Kangean will be delivered to the Indonesian domestic market via pipelines. By developing these projects, Mitsubishi will help provide a stable gas supply in Indonesia, and by extension, stable LNG exports to Japan, the company says.

Mitsubishi is also planning the Tangguh LNG project and Donggi-Senoro LNG project, which will supply a large amount of LNG to Japan, and help expand oil and gas production in Indonesia.

The Kangean PSC is located offshore East Java and comprises an area of about 4,500 sq km (1,737 sq mi). It is jointly owned by EMP (50%), JAPEX (25%), and MC (25% through its investment in Energi Mega Pratama Inc.).

While production is already under way in the Pagerungan gas field and the Sepanjang Island oil field, development work in the Kangean PSC is also ongoing in the TSB gas field and Pagerunagan Utara (PUO) oil field. Production in these fields is expected to begin by 2011.

The average oil and gas production rate in 2008 was about 6,300 boe/d, but the ongoing development should raise this to 60,000 by 2011.

07/29/2009

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