Overview of Sakakemang Gas Project Progress

Indonesian independent Medco Energi is advancing the initial development phase of its Sakakemang gas project onshore Sumatra, having launched a key tender and signed a framework gas sales agreement. Medco acquired Repsol's 45% operated equity in the Sakakemang production sharing contract (PSC) in September 2024, after Repsol divested its remaining Indonesian assets. The Sakakemang block, adjacent to Medco's Corridor PSC, has an approved Plan of Development (PoD) from the Indonesian government.

Kali Berau Dalam (KBD) Development Details

Indonesia's Synergy Engineering won the front-end engineering and design contract in 2024 for the US$630 million Kali Berau Dalam (KBD) development on the Sakakemang block. Repsol received approval for a revised PoD for KBD in early 2024, based on installed natural gas capacity of 135 million cubic feet per day. The plan includes building a central processing facility (CPF) around the KBD-2X well pad, drilling two production wells, installing a one-kilometer pipeline from the CPF to tie into the existing Transportasi Gas Indonesia (TGI) pipeline, and installing a 20-kilometer liquid carbon dioxide pipeline from the CPF to Medco's Grissik central gas plant facility. The KBD field's gas has a 26% carbon dioxide content.

Phase 1A EPC Tender and Scope

Medco is prequalifying companies for an engineering, procurement, and construction (EPC) contract for Phase 1A of the staged Sakakemang development. This EPC contract includes work to modify the Grissik facilities to receive gas from Sakakemang. The general work scope covers factory and facility modification construction, including all related piping work (including duplex pipes), civil/structural work, electrical work, and instrumentation work. The successful contractor must integrate new facilities with a capacity of 40 million cubic feet per day (MMcfd) of gas with existing facilities and infrastructure. The EPC contract has a minimum local content (TKDN) of 57%. A prequalification meeting is scheduled for 29 May, with a submission deadline of 16:00 local time (09:00 GMT) on 2 June.

Gas Sales Agreements Signed

Operator Medco, on behalf of its Sakakemang PSC partners, signed a framework gas sales agreement with Perusahaan Gas Negara (PGN) and Pertamina Patra Niaga for volumes produced at Sakakemang. The gas sales volume totals 159 trillion British thermal units for the 2027–2037 period, with an estimated value of approximately US$1.296 billion. Medco stated that development of the Sakakemang field is planned to connect to the Corridor Working Area to optimize use of existing domestic gas infrastructure. Additionally, Medco signed the fourth amendment to its Corridor GSA with PGN, extending natural gas distribution from the Corridor block to meet demand in South Sumatra, Riau, Lampung, Banten, Jakarta, and West Java provinces, amounting to 4 billion Btu per day through 2030.

Partnership and Stakeholders

Medco operates the Sakakemang PSC with a 45% stake, while Malaysia's Petronas Carigali also holds 45%, and Japan's Moeco holds 10%.