CNOOC, PGN close to sign gas deal

China oil firm CNOOC Limited is expecting to be able to sign head of agreement (HoA) to supply natural gas from its South East Sumatra production sharing contract to state gas distribution company PGN by the end of this year, a CNOOC executive said Wednesday.

"I'm hoping to be able to seal HoA by the end of this year. The deal will call us to supply 100 million standard cubic feet per day (MMCFD) of natural gas to West Java starting 2005," said Bill Murray, president of CNOOC Indonesian unit.

Murray said South East Sumatra PSC currently has 300 billion cubic feet of recoverable gas reserves.

Murray said aside from PGN, the company is also talk to several other potential customers whose names he declined to reveal.

Meanwhile, PGN president WMP Simandjuntak said one of the major issue to be resolved before signing HoA is pricing issue.

"We are trying to bring prices down from US$ 2.4 per MMBTU," said Simandjuntak. He, however, refused to reveal PGN's asking price.

He further said that gas from CNOOC will be transported using South Sumatra -West Java gas grid that PGN is planning to build. (alex)