REPUBLIKA.CO.ID, JAKARTA - A state owned oil and gas company, PT Pertamina, will become the first national company to produce shale gas or non-conventional gas in Indonesia. The contract will be signed in mid-May 2013 and will start its first production in 2018. Shale gas is natural gas trapped within shale formations. Shale gas has become an increasingly important source of natural gas in the United States. 

Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Edy Hermantoro said that Indonesia shale gas potential estimated about 574 trillion standard cubic feet (TSCF), higher than coal bed methane (453.3 TSCF) and conventional gas (153 TSCF). 

"Pertamina will produce shale gas from their working area in North Sumatra and Aceh. The potential production can reach 15 TSCF," he said on Monday.

Hermantoro added that government would also announce  the auction of two shale gas blocks located in Riau and Central Kalimantan. Both would be offered through a direct offer mechanism. Government had received 75 proposals to develop shale gas.

Shale gas reserves in Indonesia can be found in Sumatra, Kalimantan, Java and Papua. Excavation to find shale gas is not as deep as conventional gas, only 300 to 400 meters below the earth's surface, while conventional gas can reach a depth of 2,000 meters below the earth's surface. 

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