Indonesia's Bontang LNG plant expects 10% decline in 2017 output

11/11/2016

(Reuters) The output from Indonesia's Bontang LNG plant is expected to decline by 10% in 2017 to 160 cargoes from a forecast output of 177 cargoes this year, a company official said on Friday.

Bontang, operated by state energy company Pertamina unit Badak NGL, expects supply from the Mahakam block, its main source of natural gas, to decline in 2017, Badak NGL CEO Salis Aprilian told Reuters via a text message.

Around one-quarter of Bontang's 2017 output has been earmarked for domestic supply, Aprilian said, and there were still three uncommitted cargoes this year.

It was not immediately clear whether there were any uncommitted cargoes in 2017. Last month an energy ministry official said Indonesia had 63 uncommitted LNG cargoes for 2017 delivery.

A standard LNG cargo contains around 160 Mcm or 74 Mt of LNG, but different vessels can carry varying amounts.

Bontang started operating in July 1977 and shipped its 9,000th cargo on Tuesday, Badak said in a release on Friday. The facility is currently running half of its eight LNG trains, Aprilian said.

"Next year we still expect to operate 4 trains," he said, with additional gas from the Chevron IDD project, which commenced production in August, as well as Eni's Jangkrik project, where output is expected to begin in September 2017.

An LNG train liquefies natural gas by cooling it to about minus 160° C, which condenses the gas to about 1/600th of its volume for transportation by ship.

Pertamina is due to take over operation of the Mahakam block, Indonesia's top producing gas field, in January 2018 from French oil major Total, and plans to spend around $180 MM on 19 wells next year to prevent output from dropping steeply.

Last month Total said it expects Mahakam to produce between 1.4 Bcfd and 1.5 Bcfd of natural gas in 2017, slightly below its target of 1.5 Bcfd this year.

Badak NGL is 55% owned by Pertamina, 10% owned by Total and 15% owned by the Japan Indonesia LNG Co., a consortium of Japanese LNG buyers.

Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing by Sunil Nair, Richard Pullin and Christian Schmollinger