BPMIGAS chief Kardaya Warnika told reporters earlier this week that Chevron would spend the money before 2012 to develop the Gehem and Gendalo fields off the coast of East Kalimantan in Borneo.

The project is expected to increase gas supplies to the world’s largest liquefied natural gas plant, known as Bontang, which has not been able to meet commitments to its customers in Japan, South Korea and Taiwan in the last two years because of declining output at existing fields.

In confirming the move, Chevron Indonesian president director Suwito Anggoro said work would start next year, after the regulator approves the plan. But he added the investment was only viable if the gas is sold outside Indonesia, which discounts the fuel for domestic customers.

Chevron currently supplies 211 million cubic feet of gas to Bontang, about 7% of the plant’s requirements. In July, the company told the Indonesian Government that there was not enough gas in Chevron’s existing gas fields to meet customer commitments.