BP expects to complete Muriah gas deal with PLN September 2002

BP Ltd. hopes to be able to complete negotiation with the state-owned electricity company PLN over the selling price of its gas from the Muriah field in the middle of September to allow gas production to start in 2005, according to a BP senior official.

Budiman Parhusip, vice president of East Java Growth Gas BP Indonesia, was quoted by the Bisnis Indonesia daily as saying that negotiation would start next month and talks would focus on the calculation of reserves, capacity, and investment certainty.

?Price negotiation with PLN can be tough. The discussion will start November. We expect a deal can be hammered out in the middle of September 2002,? he said.

BP recently launched the Muriah gas project, located some 180 km east coast off Semarang, the capital of Central Java, which has gas reserves of around 500 billion cubic feet. The gas will be supplied to PLN?s Tambak Lorok power plant in Central Java.

Budiman said that the gas selling price would not be too different from BP?s existing gas selling contracts with PLN, which ranges US$2.45-$3 per MMBTU.(*)