"This is a huge well and demonstrates that there is still upside in the Corridor Block more than a decade after the initial discoveries were made," said Dr. Jim Buckee, President and Chief Executive Officer. "Although the impact of additional volumes from this well will not be felt until the next tranche of gas sales commences, the discovery illustrates the low cost, long-life, attractive rate of return business that underpins our strategy in Southeast Asia. Talisman's Indonesian production is currently projected to grow from 45,000 boe/d in 2006 to over 75,000 boe/d in 2010."
In conjunction with this increased field deliverability, the 400 mmcf/d Suban Phase 2 gas plant expansion has been tied in. Suban 10 was drilled on the Corridor Production Sharing Contract (PSC) Block where Talisman has a 36% interest in the PSC and field production facilities. The operator is ConocoPhillips (Grissik) Ltd. (54%) with Pertamina holding the remaining 10% interest.
The first phase of the Corridor project started in 1998, producing 195 mmcf/d (gross sales gas) by year-end. The first phase of the Suban project came on stream in late 2002. In August 2004, the Corridor PSC Block contractors agreed to sell approximately 2.2 tcf of natural gas to the Indonesian national gas transmission and distribution company (PGN) into West Java over a period of approximately 17 years. Current production from the Corridor PSC is 510 mmcf/d (gross sales gas).
The Suban Phase 2 gas expansion project was initiated to provide the gas processing facilities for these new sales. In late 2006, the installation of two new 200 mmcf/d capacity gas trains, additional wellhead pipelines and infrastructure was completed. The continuation of the Phase 2 development is expected to see additional wells drilled with the potential for more compression being added over the next few years.
The completion of these facilities represents a significant step in the development of a large scale domestic gas market in Western Indonesia. The new pipeline, which is being completed by PGN, links resource rich Sumatra with West Java, home to 60% of Indonesia's population of 210 million and most of its industrial capacity.
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