CBM Asia has announced it plans for the Kutai West PSC development.
Asian gas markets
CBM Asia’s main goal for 2014 is to commercialise the Kutai West Production Sharing Contract (PSC) in East Kalimantan, Indonesia, located near the Bontang LNG export facility. Early commercial production will help unlock the value of this asset, which is located close to high-priced Asian gas markets.
The company holds an 18% working interest in the Kutai West PSC, representing 705 billion ft3 of recoverable resources from the total 3.9 trillion ft3 in the area. Kutai West is considered to be one of the most commercially advanced of all CBM blocks in Indonesia.
Botang LNG facility
Kutai West is located adjacent to the Sanga-Sanga PSC, where VICO (BP and partners) is commercially producing and selling CBM for power generation and gas to the nearby Bontang LNG facility.
VICO noted: “This is the first time in Indonesia that any CBM facilities have produced and sold gas and represents a major milestone in the exploration of CBM potential.”
Test well drilling
Kutai West will produce from the same coal seams as at Sanga-Sanga. To date, the company and its partners have drilled four CBM test wells on the block, verifying thick coal seams with high gas content and gas saturation. The KWCBM-01 well is currently being dewatered, venting produced gas from the flare stack, which is a key first step towards larger scale production.
Sell gas locally
CBM Asia’s main focus for 2014 is to initiate commercial gas production at Kutai West with a 5-well pilot, followed by a larger commercial scale 25-well development. To this end, the company has reached consensus with its partners to sell the produced gas to locally installed gas engine power generation units selling power into the PLN grid and later to feed gas into the gas-short Bontang LNG export network.
CBM Asia CEO, Charles Bloomquist, commented: “The Kutai West and Sekayu PSC’s both have substantial engineered resources for commercialization, but Kutai West is most viable for near-term commercial development. We are focusing our efforts on achieving commercial production and gas sales at the block as soon as possible, likely before the end of 2014. We estimate that with completion of the Phase 2 development CBM Asia will be operational cash flow positive. Jointly with its partners the Company has developed a technical plan and budget for the Kutai West commercial development and will post details in a new presentation on its website in the coming days.”
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/cbm/04042014/cbm_asia_to_commercialise_indonesian_project_690/