NuEnergy recommences pilot production at Indonesia gas project
SYDNEY -- NuEnergy Gas recommenced pilot production operations at its Muara Enim PSC Pilot Production Site in South Sumatra, Indonesia, on May 25, 2013.
NuEnergy is now close to awarding a drilling contract to one of a shortlist of contractors, with the aim of committing to a two-well development program (with option to drill more) to complete the Muara Enim PSC pilot production site. The drilling of the next two pilot wells is scheduled to commence within the next six weeks. Dewatering operations will continue, in parallel with drilling operations, for the next two pilot wells, which will be connected to the pilot site as they are completed.
Given the high gas prices and significant unmet demand for gas in South Sumatra, and the regulatory approvals underway to approve the sale of pre-plan of development production, some conversion of contingent resources to reserves is expected in the coming months, NuEnergy said. As the pilot program gains maturity, the company will work in cooperation with its off-take partner, Pertamina, to commercialize the gas produced at the pilot site.
Current production at the pilot site is sufficient to generate on-site power and to offset operations costs of $2,000 per day. With a fully operational pilot plant on track for completion by year end, the forecast 1.5 MMscfd of coalbed methane production is expected to generate revenue of roughly $15,000 per day.