SINGAPORE, Oct 17 (Reuters) - Chevron Corp said on Friday it has made a final investment decision (FID) on the first stage of a deepwater natural gas project in Indonesia, but delayed a decision on the second phase of the multi-billion dollar project.
The Chevron-operated Indonesia Deepwater Development (IDD) project, which includes the Bangka, Gendalo, Gehem, Gandang and Maha fields off eastern Borneo, is the country’s first ultra-deepwater natural gas integrated project.
Chevron recently made a final investment decision on the first part of the project - the Bangka field - after receiving all required government approvals, the company said without providing details.
A timeline to make a decision on the second stage of the project - development of the Gendalo and Gehem fields - will slip from this year, the company said.
“A final investment decision for the second stage of IDD will not be achieved in 2014,” a Chevron spokesman said, without saying how long the FID would be delayed.
Chevron said it has not received the necessary government approvals for the second stage, and that the delay will impact the contractual and commercial agreements already in place.
Talks with the government to get the project back on track are “still in early phases and it will require additional time and engagements before we are clear about the project schedule,” the spokesman said.
Chevron expects the Gendalo and Gehem fields to produce a maximum of 1.1 billion cubic feet of natural gas and 47,000 barrels of condensate per day, according to the company’s website.
The delay comes as Indonesia, one of the world’s biggest exporters of liquefied natural gas (LNG), is turning to foreign supplies to keep up with rapidly growing domestic gas demand.
The Southeast Asian country will begin LNG imports by 2018 and is aiming to curb new exports of the super-cooled gas.
Gas from IDD will be shipped via pipeline for liquefaction to Indonesia’s existing Bontang LNG plant. (Reporting By Jacob Gronholt-Pedersen; Additional reporting by Fergus Jensen in Jakarta; Editing by Tom Hogue)