BPMIGAS will most likely annul gas contract with Singaporean firm

Oil and gas upstream regulator BPMIGAS will most likely annul the gas sales and purchase contract with Island Power Singapore as the latter had yet to fulfill all conditions set in the contract.

?We shall most likely annul the contract because the firm has yet to fulfill all the requirements. All the gas that has been allocated for the firm will be used for the domestic market,? BPMIGAS?s deputy head for marketing affairs Edi Purwanto said on Monday.

Under the contract, which was signed by the Singaporean firm and U.S. firm ConocoPhillips, the largest gas producer in Sumatra, the American firm will pipeline gas to the Singaporean firm at the rate of 110 million cubic feet per day (MMCFD) for 15 years starting in 2006. But, gas delivery to Island Power has yet to be executed, because the Singaporean firm had yet to fulfill all requirements set in the contract.

Edi did not specify the conditions that Island Power has failed to meet, but some reports say the firm had yet to get approval from the Singaporean authorities for the purchase of the gas.

Analysts say if the contract is cancelled, analysts say state owned gas transmission and distribution company PT PGN will have more gas reserves to distribute through its South Sumatra-West Java pipeline which is about to be completed. (Alex)