BG, ARCO double Tangguh proven gas reserves

Northern Explorer II drillship is shown testing Vorwata-11 appraisal well earlier this year for BG plc on the Muturi block off Irian Jaya. The well flowed 35 MMcfd of gas on test and was one of 13 wells drilled by BG and ARCO to prove up further gas reserves for Indonesia's planned Tangguh LNG export project. Photo courtesy of BG.

BG Exploration & Production Ltd. and ARCO Indonesia Inc. claimed to have more than doubled proven gas reserves earmarked to supply Indonesia's planned Tangguh liquefied natural gas project.

The operators said a 13-well, 12-month appraisal drilling program on the offshore Muturi, Berau, and Wiriagar blocks resulted in estimated gas reserves being hiked to 14.4 tcf proved and 18.3 tcf proved plus probable.

LNG prospects

BG said Indonesian state firm Pertamina initially plans to build a two-train, 6 million metric ton/year LNG plant in Irian Jaya to supply the traditional LNG markets of Japan, South Korea, and Taiwan, as well as emerging markets in the Asia-Pacific region.

"However," said BG, "these proved gas reserves will support three trains, each of 3-3.5 million tons/year of LNG, for 25 years. Development planning efforts are continuing to support a 2003-04 timetable for the first LNG exports from Tangguh."

Leon Codron, president of ARCO Indonesia, said, "Tangguh has become the leading grassroots LNG development available to Asia-Pacific markets as a result of the ideal location close to markets, the prolific nature of the reservoirs with high-quality gas, and the low cost of development."

A BG official said that initial capital outlay for the Tangguh LNG scheme is expected to be $3 billion; BG has so far spent $87 million for exploration and appraisal of Vorwata discovery on Muturi block.

Reserves

DeGolyer & MacNaughton (D&M), Dallas, assessed the reserves on behalf of BG and ARCO, having earlier assessed ARCO's Wiriagar and Berau blocks (OGJ, Sept. 15, 1997, p. 30).

D&M broke out the individual production-sharing contract block reserves as: Berau, 10.3 tcf proved and 12.4 tcf proved plus probable; Muturi, 3.1 tcf proved and 3.8 tcf proved plus probable; and Wiriagar, 1 tcf proved and 2.1 tcf proved plus probable.

Berau block partners are: operator ARCO 48%, Occidental Berau of Indonesia Inc. 22.856%, Nippon Oil Exploration (Berau) Ltd. 17.144%, and KG Berau Petroleum Ltd. 12%.

Muturi block is owned 52.63% by operator BG and 47.37% by the Cairn Ltd. unit of Genting Bhd. Wiriagar interest holders are operator ARCO 80% and KG Wiriagar Petroleum Ltd. 20%.