ConocoPhillips, PGN to ink gas deal Monday

US oil, gas firm ConocoPhillips and state gas distributor PGN will sign 20-year gas sales agreement (GSA) contract to supply gas from the former?s Corridor PSC block onshore South Sumatra to be distributed by the latter in the western part of Java, a BP Migas official said Friday.

BP Migas vice-chairman Kardaya Warnika said that under the GSA ConocoPhillips would initially supply 175 MMCFD of gas to PGN starting February 2007 through PGN?s 600-km pipeline, which is slated to be completed in 2006/2007. The supply will be ramped up to 400 MMCFD within the next few years.

Kardaya said gas at the wellhead would be priced at US$1.85 per MMBTU, increasing to $2 per MMBTU after supply volume reached 400 MMCFD.

PGN will redistribute the gas to its customers in Jakarta, west Java and Banten.

ConocoPhillips and state electricity firm PLN are also working to finalize deal to supply gas from Corridor Block to PLN?s West Java power plants using PGN?s pipeline network. ConocoPhillips is slated to supply 300 MMCFD of gas for 20 years.

?We hope to finalize the deal this month,? said PLN director Ali Herman Ibrahim. He the issues that are yet to be resolved in negotiation including force majeur and penalty issues He did not give further detail.(godang)