The Offshore Gas Fields Development Projects in Mahakam Block, East Kalimantan

Mahakam blok

The Mahakam block in East Kalimantan, Indonesia, under the management of Total E&P Indonesie (The Operator) and INPEX, provides around 30% of Indonesia’s natural gas output.

As the natural production decrease (decline rate) in the Mahakam block due already old, currently,  TOTAL must perform further drain of gas reserves or improved gas recovery (IGR) in order to maintain the gas production. Total E&P Indonesie and their partner Inpex, have since 2011 deployed increasingly expensive means to arrest the decline, including additional rigs and advanced technology.

The Offshore Mahakam Block

INPEX entered into a production sharing contract (PSC) with the Indonesian Government in October 1966, at that time acquiring a 100% participating interest in the Offshore Mahakam Block.

The comparison of recoverable reserves Mahakam field and other gas fields in Indonesia and Australia:

  • Greater Gorgon in Australia (40×1012 cu ft (1,100 km3))
  • Mahakam gas field in Indonesia (31×1012 cu ft (880 km3))
  • Tangguh gas field in Indonesia (14×1012 cu ft (400 km3))
  • Peciko field in Indonesia (6.1×1012 cu ft (170 km3))
  • Arun gas field in Indonesia (5×1012 cu ft (140 km3))

INPEX farmed out a 50% participating interest in the Offshore Mahakam Block to CFP (now TOTAL) in July 1970. Total E & P Indonesia (TOTAL or TEPI) was established in Jakarta, August 14, 1968. This venture subsequently made a series of discoveries in the fields:

  • Bekapai (oil),
  • Handil (oil),
  • Tambora in 1974 (oil and gas),
  • Tunu in 1977 (gas),
  • Peciko (gas),
  • Sisi and Nubi (gas), as well as
  • the South Mahakam (gas) fields,

each of which has continued to produce crude oil and natural gas.

The crude oil and condensate produced from these fields are shipped mainly to oil refineries and power companies in Japan by tanker from the Santan and Senipah terminals. Most of the natural gas is supplied to the Bontang LNG Plant, then shipped as LNG to Japan and elsewhere.

The Mahakam block in East Kalimantan, Indonesia, under the management of Total E&P Indonesie (The Operator) with participation from INPEX, provides around 30% of Indonesia’s natural gas output.

As the natural production decrease (decline rate) in the Mahakam block due already old, currently,  TOTAL must perform further drain of gas reserves or improved gas recovery (IGR) in order to maintain the gas production. Total E&P Indonesie and their partner Inpex, have since 2011 deployed increasingly expensive means to arrest the decline, including additional rigs and advanced technology.

In 2013, TEPI allocates approximately :

  • US$ 1.2 billion for  drilling development wells,
  • US$200-US$300 billion for well intervention and production, and
  • US$ 1-US$1.1 billion for maintenance.

Total budget : US$ 2.5 billion.

offshore-mahakam-block

Current Fields Development EPCI Projects

Two (2) TEPI EPCI Projects are on-progress:

  • Sisi Nubi Phase 2B and Peciko Phase 7B Project
  • South Mahakam Phase-3 Project

Sisi Nubi Phase 2B and Peciko Phase 7B Development Project

The projects are estimated to cost up to $2 billion.

Sisi – Nubi is a field located on the East of Kalimantan, Indonesia, around 25km offshore from the Mahakam river delta and 30km to the southeast of the Tunu field in the water depth of 60m to 80m. The two fields lie at the boundary between two permits, the main Mahakam PSC and the Tengah JOA. A unitization of this field (Sisi-Nubi Production Unit) was approved in 1997 by BPPKA/PERTAMINA leading to the current Sisi Nubi unit. The current contract participations are, (defined based on 1P wet gas reserves certified by DGMN as of 1 January 1999), Total (47.9%, operator), INPEX (47.9%), Pertamina (3.8%) and Pertamina Ind Partner (0.4%).

Peciko is a gas field located offshore in the Mahakam delta, on Kalimantan in Indonesia. The field lies on the Mahakam PSC, operated by Total (50%) with INPEX (50%). The water depth is between 30 – 50 metres, to the South of the Mahakam river delta and about 25 kilometres southeast of the TOTAL E&P Indonesie Senipah terminal.

The objective of this Sisi Nubi Phase 2B & Peciko 7B Project is to develop the following facilities:

  • WPN3 Platform and and its connecting pipeline (WPN3 to MWPN)
  • WPS2 Platform and and its connecting pipeline (WPS2 to MWPS)
  • SWP-J Platform and and its connecting pipeline (SWP-J to MWP-A)

SN2B & PCK7B/EPCI Project Works consist of:

  • Engineering, Procurement, Supply, Construction, Load Out and Sea Fastening,
  • Transportation and Installation of Jackets and Topsides,
  • Hook Up and Assitance for Commissioning and Start Up of of Topsides for Sisi Nubi WPS2 and WPN3 Wellhead Platforms and Peciko SWP-J Wellhead Platform and
  • Modifications to Existing Facilities.

TEPI is on progress to complete the installation of new platforms for Sisi Nubi Phase 2B and Peciko Phase 7B Project,

  • WPS2 Wellhead Platform at Sisi field,
  • WPN3 Wellhead Platform at Nubi field.
  • SWP-J Wellhead Platform at Peciko field.

South Mahakam Field Development Project – Phase 3

The South Mahakam is part of the program being implemented to offset production decline impacting the Mahakam PSC (Production Sharing Contract).

The overall development costs are estimated in the POD at US$ 306 million (US$ 185 million for drilling and US$ 121 million for facilities). Total E&P Indonesie (50%) operates the project alongside Inpex (50%).

The project envisages a phased development of

  • three gas condensate fields (Stupa, West Stupa and East Mandu) for SMK1&2/EPCI Project, and
  • two gas fields (Jempang and Metulang) for SMK3/EPCI Project,

which are located approximately 35 kilometers southeast of Balikpapan and 58 kilometers south of the Peciko field, with water depths ranging from 45 to 60 meters.

The project, Phase 3 of the development of the South Mahakam area, consists in the installation of an additional wellhead platform and the drilling of 7 development wells with a tie-in to the East-Mandu platform which had been installed as part of earlier phases of the South Mahakam area development through a 12”-7.7 km pipeline.

The SMK3/EPCI Project Works consist of:

  • Engineering, Procurement, Supply, Construction, Load Out and Sea Fastening,
  • Transportation and Installation of SMK3 Offshore Wellhead Platforms and Associated Sealines,
  • Hook Up and Assistance To Commissioning and Start Up of SMK3 Offshore Wellhead Platform Including
  • Modifications to Existing Facilites .

SMK3 Project status is still ongoing to complete the contruction at Handil Yard.

Project Targets and Capacity of Production/ Targets

The drilling targets are given below:

  • WPS2 Wellhead Platform at Sisi field by january 2014,
  • WPN3 Wellhead Platform at Nubi field by February 2014,
  • SWP-J Wellhead Platform at Peciko field by March 2014
  • Jempang and Metulang Wellhead Platforms at South Mahakam Field by the 2nd quarter of 2015,

The (gas) production capacity of the platforms are given below:

  • WPS2 Platform at Sisi field : 200 MMSCFD,
  • WPN3 Platform at Nubi field : 150 MMSCFD,
  • SWP-J Platform at Peciko field : 150 MMSCFD,

Where all these platforms are expected by TEPI to start production in the 3rd quarter of 2014.

According to SKK MIGAS data (see BI on 07/02/2014) that a new platform in the Peciko 7B field will operate in the first quarter of 2014 with production of 170 MMSCFD of gas and 4,000 barrels of oil and condensate per day.

Oil and Gas Production 2012-2014 from Mahakam Block

In year 2012, TOTAL produced about 1.87 billion cubic feet per day of natural gas and 67,000 barrels per day of condensate.

In mid 2013 the field was reported to be producing around 1.7 billion cubic feet per day (BCFD) of gas as well as 67,000 barrels per day of condensate.

In 2014, TEPI set the production targets:

  • 1.66 billion cubic feet per day (BCFD) of gas,
  • 63,000 barrels per day of condensate.

References / read more :

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5 responses to “The Offshore Gas Fields Development Projects in Mahakam Block, East Kalimantan

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