ConocoPhillips-Petronas gas supply negotiation stalled

Negotiation between ConocoPhillips and Malaysia?s Petronas to supply natural gas from the former?s gas field in South Sumatra to peninsular Malaysia had been stalled for months due to disagreement over gas price, a BP Migas official said Thursday.

?Petronas is asking for lower price than we are willing to offer on the argument that Petronas is selling gas to its customers at subsidized price,? said BP Migas senior official in charge of gas marketing.

Petronas and ConocoPhillips had signed an MoU last August, under which natural gas will be flowed to Malaysia starting the fourth quarter of 2005 at an initial rate of 100 million standard cubic feet per day (MMCFD) ramping up to 300 MMCFD after one year. The deal will call for the supply of 2.19 trillion cubic feet of gas for the period of 20 years.

Earlier, both parties were targeting to complete the full gas sales agreement before the end of 2002. Joko said the disagreement over price would make it difficult to seal a deal in the near future. (godang)