Indonesia says Chevron deepwater gas output to start 2014

JAKARTA Feb 23 (Reuters) - Chevron's Corp's Gendalo-Gehem deepwater gas project in Indonesia will start initial production in the third quarter of 2014 with 120 million standard cubic feet per day (mmscfd), Indonesia's energy watchdog said on Wednesday.

Initial production will come from the Bangka gas field, one of five in the project in the Makassar Strait, before the other fields start in 2016 for gas output of 1,120 mmscfd and oil condensate production of 55,000 barrels per day.

"We expect the project to be onstream by 2014," R. Priyono, chairman of Indonesia's oil and gas watchdog BPMigas, told reporters on the sidelines of a gas conference in Jakarta.

The project has been expected to produce up to 1,100 mmscfd and 31,000 barrels of condensate per day.

Chevron said in December that it had awarded the first design contracts to Technip SA's Indonesia unit for the floating production units and to Worleyparsons Ltd's Indonesian unit for the subsea and flowline systems.

It also said China's Sinopec would buy a minority stake, without giving details. Chevron owned 80 percent of the project, with the rest held by Italy's Eni and Indonesia state oil and gas company Pertamina.

Indonesia, the world's third-largest LNG exporter behind Qatar and Malaysia, is seeking non-oil energy sources such as natural gas and coal to meet rising domestic demand for power and to reduce consumption of crude oil as its reserves decline.

It is seeking more foreign investment but corruption, inadequate infrastructure and policy flip-flops have been deterrents to attracting interest in long-term projects.

Indonesia has far more gas than oil but has limited supplies for its own use due to long-term LNG export commitments. Its exports of LNG will fall to 362 cargoes this year from 427 in 2010. (Reporting by Alfian; Editing by Neil Chatterjee)