By Riko Siahaan
PT Kayan LNG Nusantara (Kayan LNG), which operates a mini LNG plant in Simenggaris, North Kalimantan Province, has requested an increase in gas feed to meet the needs of domestic and export market off-takers.
Currently, the LNG supply to the plant is at 14-15.5 million standard cubic feet per day (MMSCFD), which falls short of the contracted volume of 22 MMSCFD agreed upon with upstream companies PHE Simenggaris and Medco E&P Simenggaris. These companies, through their joint venture JOB Pertamina-Medco E&P Simenggaris (JOB Simenggaris), operate the Simenggaris gas block.
A source told Petromindo.com that Kayan LNG has secured sufficient buyers both domestically and internationally to absorb the full 22 MMSCFD of gas starting August 2024. However, JOB Simenggaris is still working to ramp up gas production to meet this demand, limiting Kayan LNG's operations to a maximum of 15.5 MMSCFD.
Read also : JOB Simenggaris set to increases gas supply to Kayan LNG
The source added that Kayan LNG is fully capable of operating at its maximum capacity of 28.6 MMSCFD.
A company insider expressed hope that the upstream oil and gas authority SKK Migas will actively monitor and encourage JOB Simenggaris, as well as PHE Simenggaris and Medco E&P Simenggaris, to increase gas output and ensure compliance with the agreed delivery volumes.
The current situation has put Kayan LNG in a challenging position, where LNG buyers' demand exceeds the available gas supply, impacting its operational efficiency and market commitments.
In May 2020, Kayan LNG signed a gas sales and purchase agreement with PHE Simenggaris and Medco E&P Simenggaris for the supply of gas to the mini LNG plant.
Editing by Reiner Simanjuntak
