ConocoPhillips, PLN in talks to supply gas from S. Sumatra to West Java

US oil giant ConocoPhillips is in early stage of negotiation with state electricity company PLN to supply 600 million standard cubic feet per day (MMCFD) of natural gas from ConocoPhillips-operated Corridor giant gas block in South Sumatra to PLN?s power plants in the western part of Java, a BP Migas official said.

?Gas from Corridor block is planned to offset gas supply decline from BP-operated Offshore NothWest Java (ONWJ) gas block, which is expected to happen in 2006 and to anticipate PLN?s increasing gas supply needs with the development of Muara Tawar power plant,? said Kardaya Warnika, vice-chairman of BP Migas, Indonesia?s upstream authority.

in Western part of Java, PLN currently operates the 1,446-MW Muara Karang combined cycle power plant and another 6x100 MW Muara Tawar combined cycle is expected to commence operation late next year.

Kardaya said the plan was to supply gas to West Java by constructing dedicated pipelines from Corridor Block to West Java. Gas supply is expected to commence between 2006-2007.

?Constructing own pipeline, rather than using PGN?s pipeline is cheaper since no toll fee must be paid,? he said.

State gas distribution firm PGN is also planning to construct pipeline that would connect gas-rich province of South Sumatra to West Java, which would come into completion in 2006.Under PGN?s plan, gas supply would come mainly from Pertamina?s gas fields in South Sumatra.

An industry source contacted by Petromindo.Com said the plan could jeopardize PGN?s pipeline plan because it was also hoping to get PLN as anchor buyer. (alex)