The ESDM Minister Led the Groundbreaking Ceremony for the Jambaran-Tiung Biru (JTB) Project

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Bojonegoro - Bojonegoro - Monday (25/9), the Minister for Energy and Mineral Resources (ESDM), Ignasius Jonan, laid the first stone (groundbreaking) of the Jambaran-Tiung Biru (JTB) Unitized Gas Fields Project at the Bandungrejo village, Ngasem district, abupaten Bojonegoro regency, East Java. Jawa Timur. This groundbreaking ceremony constituted the commencement stage of the construction works of the Gas Processing Facilities (GPF), which was attended by the Head of SKKMigas, Amien Sunaryadi; The Head of BPH Migas, Fanshurullah Asa; The Head of SKKMigas Representative for Jabanusa, Ali Mashyar; The Head of Commission VII DPR RI, Satya W. Yudha; The President Commissioner of PT Pertamina (Persero), Tanri Abeng; the President Director of PT Pertamina (Persero), E. Massa Manik; the Upstream Director of Pertamina (Persero), Syamsu Alam; the Director for Gas and Renewable Energy of Pertamina (Persero), Yeni Andayani; the President Director of PT Pertamina EP Cepu (PEPC), Adriansyah and his staffers; the Governor of East Java, represented by Assistant II, Fatah Yasin; the Bojonegoro regent, Suyoto; the Director for Perusahaan Listrik Negara (PLN) Regional Jawa-Bali, Djoko Raharjo Abu Manan; the Forum Pimpinan Daerah (Forpimda) of Bojonegoro; Musyawarah Pimpinan Daerah (Muspida) of the Regency Administration of Bojonegoro; the Deputy Regent of Blora, Arif Rohman; a number of district and village heads of surrounding JTB, and other invites.

On such occasion, Jonan explained that the JTB field development had previously encountered obstacles, some of which were the gas sales price and the management of the field. Resolutions were made amongst which the capex efficiency effort from US$ 2,1 billion to US$ 1,5 billion. “We made a lot of savings, up to US$ 500 million,” he said. This cost efficiency also led to a lowering of the gas price to US$ 7,6/MMBTU without escalation, where it previously could have stood at US$ 8/MMBTU plus 2% escalation. Furthermore, a transfer of management was to be conducted from ExxonMobil Cepu Limited (EMCL) to PEPC, so that Pertamina will hold 90% participating interest (PI) and the remaining 10% will be held by the regional administrations.

SKKMigas Head, Amien Sunaryadi, stated that this project will increase state revenue. “It is estimated that the project , right through its contract completion in 2035, will generate US$ 3,61 billion or more than Rp 48 trillion,” he said. For instance, by providing employment opportunities as many as 6,000 jobs during construction. The entire production will serve the domestic market.

An amount of 100 MMSCFD will be allocated to Pertamina, to be distributed to PLN for electricity consumption in East and Central Java, while 72 MMSCFD will supply industrial needs in East and Central Java. Gas price at the wellhead is US$ 6,7/MMBTU flat for 30 years. With a toll fee of US$ 0,9/MMBTU, the price at PLN is US$ 7,6/MMBTU. “This is a commitment of the upstream gas industry to give priority to the domestic consumers,” said Amien.

By way of information, the largest gas consumers are the industries, followed by electricity. Since 2013 the domestic allocation exceeded exports. In 2017, domestic gas contracts reach 3,855 MMSCFD, while exports stands at 2,618 MMSCFD. “Almost 60% natural gas production is for domestic use,” explained Amien, adding that increases in domestic use is shown by the construction of new gas infrastructure and the production start of a number of new gas fields.

The President Director of PT Pertamina (Persero), E. Massa Manik, stated that this groundbreaking provides new hope for Indonesia, particularly to overcome the deficit of gas supply in Central and east Java. With a JTB gas reserve of 1,9 trillion cubic feet (TCF), Pertamina hopes that the industries in Central and East Java will get sufficient supplies of gas to drive the national economy forward.

The gas produced from 6 (six) wells at the JTB field will be processed through the GPF. From the average production of 330 MMSCFD, GPF will separate the CO2 from the H2S, to obtain sales gas of 172 MMSCFD. Massa expressed is optimism that the JTB field will produce in 2021 and thereby speed up the utilization of the Gresik-Semarang gas transmission pipeline. Currently, through its subsidiary, PT Pertagas is completing the construction of pipeline from Gresik-Semarang extending 267 km with an investment value of US$ 515,7 million.

PEPC President Director Adriansyah, explained that these upstream and downstream projects constitute PERTAMINA’s commitment through its subsidiaries, namely PEPC and Pertagas to drive the economy and monetization of gas reserves in the Cepu Block. “The inauguration brings enthusiasm as well as challenges. We are fully committed in executing this project to the best of our abilities in an effort to meet the national energy demand,” he said.

According to Ancha, the nickname Adriansyah is known to be called by, PEPC will be the sole operator after EMCL releases its shares in JTB, so that Pertamina controls 90% of PI and 10% is owned by the regional administrations. The JTB project became the largest project in East Java, so Ancha called for government support and all stakeholders to make the project work smoothly.

The Regent of Bojonegoro, Suyoto, welcomed the arrival of the JTB gas field project after it had been delayed, but he hoped the JTB project could bring happiness for Bojonegoro residents so that it could improve the economy of the people. "On the condition that the JTB is managed with openness. In business, legal, and social matters, we are ready to support the smooth execution of this project," he said. In addition, Suyoto also requested that JTB engage local workers in accordance with their respective expertise. Given that many of the local people around JTB have work experience from the Banyu Urip project. "I hope the needs of both unskilled and semi-skilled jobs can give priority to local people," Suyoto said.