EXPLORATION and production company Australian Worldwide Exploration announced the Indonesian government has approved the plan of development (POD) for the Lengo gas project in offshore east Java.

Operator KrisEnergy said approval of the POD for the Lengo gas field in the Bulu production sharing contract (PSC) paves the way for KrisEnergy to pursue formal negotiations for gas sales agreements.

AWE managing director Bruce Clement said the Lengo field was well positioned.

“Lengo is well positioned to supply a strengthening gas market in east Java where growing demand has helped gas prices remain firm despite current oil market volatility.”

KrisEnergy said production is expected to start approximately 24 months after the joint venture partners declare final investment decision and is expected to plateau at 70 million cubic feet per day.

The Bulu PSC covers 69,700 hectares in three separate areas over the east Java basin in water depths of between 50 and 60 metres.

Located in the Bulu A area, the Lengo gas discovery will be developed via four development wells and an unmanned wellhead platform.

A 20 inch, 65 kilometre export pipeline will transport the gas directly to shore.

The Bulu PSC is adjacent to the KrisEnergy operated east Muriah PSC containing the east Lengo gas discovery.

KrisEnergy said the company plans to drill an appraisal well in the east Muriah PSC and if successful will develop east lengo gas via a single well tied back to the Lengo facilities.

KrisEnergy is the operator and holds 42.5% operated working interest in the Bulu PSC, AWE holds 42.5%, PT Satria Energindo has 10% interest and PT Satria Wijayakusuma holds 5% interest.