Malaysia’s national energy company Petronas is reportedly interested in coming back on board Pertamina’s East Natuna asset offhsore Indonesia — Southeast Asia’s largest unexploited gas discovery — with carbon capture, utilisation and storage now being viewed as a potential saviour for this giant stranded resource.
Indonesia’s upstream regulator SKK Migas said it has received interest from Petronas about East Natuna (formerly Natuna D-Alpha) and would immediately broker talks with operator Pertamina.
“They [Petronas] are interested, but they have to negotiate with Pertamina as well," said SKK Migas head Dwi Soetjipto.
“We will also immediately encourage [Petronas] to develop East Natuna," Dwi was quoted by local media Katadata’s D-Insights.
SKK Migas last year said it was open to discussing revised fiscal terms and incentives for East Natuna, where in-place reserves have been pegged at 222 trillion cubic feet of gas, although further appraisal work will be needed.
Dormant for around 50 years
However, the gas contains around 71% carbon dioxide and that, coupled with its remote offshore location, has led to historic suggested capital expenditure budgets as high as $40 billion.
Italian operator Agip discovered the giant gas field in the early 1970s, but all efforts to date have failed to get this project off the drawing board.
Pertamina and Esso in 1980 formed a joint venture for the Natuna D-Alpha’s development, but this came to nought.
Fast forward several decades and a novel consortium of ExxonMobil, Pertamina and Thailand’s national upstream company PTTEP worked hard to try to monetise the asset, but again without any success.
Other industry heavyweights understood to have historically held talks with Pertamina and the Indonesian authorities on the appraisal and potential development of the field include TotalEnergies, Petronas and Inpex.
Now, CCUS technology could help to unlock this stranded asset. Exploitation of the discovery could also go a long way to Indonesia achieving the government’s stated target of boosting domestic gas production to 12 billion cubic feet per day by 2030 — output as high as 8 Bcfd from East Natuna alone has been touted by some sources.
Petronas is already embarking on CCUS for the second phase of its Kasawari giant gas project offshore Malaysia and has teamed up with Japan’s Mitsui OSK Lines to collaborate on the transportation of liquefied CO2, as part of the CCUS value chain.
These CCUS skills and technology could be transferred to East Natuna.
Petronas had not given Upstream a statement regarding SKK Migas’ assertion about its East Natuna plans at the time of publishing.