Deal to sell gas to Malaysia may be off: BP Migas

Upstream oil and gas authority BP Migas said negotiation to supply gas from ConocoPhillips-operated Corridor block onshore South Sumatra to peninsular Malaysia was stalled and may be cancelled, as would-be buyer Petronas had shown no sign it would continue negotiation.

?Although formally Petronas had not declared to cancel negotiation, its Jakarta office had indicated that it may not be interested to continue with the negotiation,? said BP Migas deputy chairman Trijana Kartoatmodjo on Tuesday.

Another BP Migas deputy chairman Eddy Poerwanto said that major stumbling block that caused negotiation stalled was the low price asked by Petronas. ?Petronas is asking for US$ 1.78 per MMBTU,? which is far lower than domestic selling price of around $2.5 per MMBTU. It?s impossible for us to sell at that price,? said Eddy.

Petronas and ConocoPhillips had signed an MoU in August 2001, 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. (alex)