Publications

Kuala Langsa gas field, located in Aceh province, Indonesia, has a large reserve with high CO2 content (81% mole from exploration well test). With current high demand of natural gas for domestic, one of important issues for Indonesia’s oil and gas industry is monetization of undeveloped gas reserves. Kuala Langsa gas field development is a good example to examine the factors affecting the monetization efforts, e.g., gas marketing target, field economics, gas processing technology, environmental issues, etc. When discovered in 1992, Kuala Langsa gas field was uneconomically viable to develop. Low gas price and high capital investment were the dominant factors. In mid-2011 the government increases domestic gas price significantly to promote the development of gas field with more technically challenging discoveries as that of Kuala Langsa. Accordingly, previous study conclusion needs to be revisited. Due to the environmental concerns on CO2 disposal and the dynamics of gas market and infrastructure situations in Aceh and Northern Sumatera, where the development of Arun Regasification Terminal and pipeline connecting Aceh and North Sumatera are underway, the Kuala Langsa gas monetization efforts face big challenges to find the gas market with viable economics. The focus of this paper is to analyze the impact of three typical gas markets on monetization efforts. Sales gas specification as per market requirements are: 1) Feed gas for LNG plant (50 ppmv CO2), 2) Pipeline gas (5% mole CO2), 3) Feed for power plant fuel gas (40% mole CO2). The analysis present how gas market specification drives the configuration of facilities and eventually controls development cost, whereby at the end determines gas pricing. This situation is typical in northern Sumatra market and is very different from the Java market characteristics where gas demand is high with the availability of gas infrastructure. The selection of the options will be decided based on the highest economic returns resulted from combination of those parameters stated above. Finally, this paper will provide overview for the monetization of typical large-high CO2 content gas reserve involving all considerations discussed from the case study.