During 1980-1990. the economic growth of South East Asia countries ranged between 5.5% to 7.9% per year. Along with this development, the energy would be an important element to maintain or increase this growth. In Indonesia, for instant, the growth of energy demand is estimated to be 6% during years of 2000 to 2010. For natural gas demand especially, Indonesia will consume about 1.1 Tcf/year. Java Island, in this case, would become the highest increase of energy demand, from 393 MMcf/D in 1989 to 1200 MMcf/D by 2010. By that time, the natural gas production from both non associated gas and associated gas reservoirs in the Northwest Java basin from where the large amount of gas is produced, is predicted to decline.

In order to overcome this problem, another prospective gas resources that could be exploited is coalbed methane. This kind of prospective gas resource has been found in large reserve in the of Northwest Java basin, epecially in Talang Akar formation, some of the coalbed methane layers found in Talang Akar posses overpressure condition. In this formation, it is found that the vitrine reflectance of coal, ranges from 0.5% to 1.9%. The gas resources from coalbed methane reservoir in Indonesia is estimated about 213 Tcf, and of 33.4 Tcf of this volume is found in Northwest Java basin area. Until this time, these coalbed methane deposit have not yet been developed or exploited commercially.

The economics and the technical aspects of the coalbed methane exploitation and its properties in Talang Akar formation are evaluated and discussed in this paper.

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