Karawang, West Java. The government has scrapped plans to develop a Rp 34.5 trillion ($2.66 billion) Cilamaya deep sea port project in West Java on worries it may disrupt the offshore oil and gas production of a block owned by state energy company Pertamina.

“Pushing ahead with the [Cilamaya] project may prove to be dangerous,” Vice President Jusuf Kalla told reporters in Karawang district after an aerial tour of the proposed location.

“There’s a high likelihood that ships can hit rigs — it’s just far too risky. As in oil and gas facilities, safety must be the primary concern when building a port.”

He added the government would relocate the planned port elsewhere. Subang and Indramayu districts, also in West Java, are among the possible candidates.

The Cilamaya site is located a short distance from an oil and gas block operated by Pertamina Hulu Energi Offshore North West Java (PHE ONJW).

The Cilamaya area supports a multitude of projects, according to PHE acting president director Bambang Kardono.

Oil production at the PHE block stands at about 40,000 barrels and 180 million standard cubic feet of gas per day, Bambang added.

The current output is just 50 percent of the block’s full capacity.

Once the block reaches full production capacity, it is expected to generate up to Rp 21 trillion worth of oil and gas.

The company is now seeking to renew its contract of work with the government, which will expire in 2017.

The Cilamaya deep sea port project was initially meant to help ease the burden on the overloaded Tanjung Priok Port in North Jakarta.

The plan had been continuously postponed since 2010.

Transportation Minister Ignasius Jonan previously said foreign investors would contribute 49 percent of the funds to complete the project.

Investor Daily

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Source: The Jakarta Globe