EMP signs deals to sell gas at $4-4.8/mmbtu

JSX-listed oil and gas firm PT Energi Mega Persada Tbk (EMP) announced on Tuesday that its subsdiaries had signed amandements to several gas deals, allowing them to sell their gas to industries at higher prices of US$4-4.8/mmbtu.

EMP said in statement that its subsidiary Kalila (Bentu) Ltd signed a gas sales and purchase agreement (GSA) to supply gas from Korinci field of Korinci Baru PSC in Central Sumatra at the price of US$4/mmbtu to PT Riau Andalan Pulp & Paper with a 2 percent price escalation every three years. Gas supply is expected start as early as December 2007 at a rate of around 7 to 10 mmcfd.

The gas supply is expected to gradually increase once the Sengat field starts production by June 2009 which will add another 21 mmcfd to the gas supply. The total gas volume contracted under the GSA is 86 BCF until year 2020, EMP said.

Kangean Energy Indonesia Ltd (KEI) signed GSA to supply gas at approximately 300 mmcfd from its Terang, Sirasun, and Batur fields in Kangean PSC for $4.09/mmbtu to the East Java?s customers, including PT Petrokimia Gresik, PT PLN, PT Pertagas, and PT Indogas Kriya Dwiguna early in 2010. The total gas volume contracted under the GSA is 855 BCF until 2028.

Another EMP?s subsidiary Costa International Group Limited also signed the heads of gas sales and purchase agreement (HSGA) to supply gas from Gebang PSC JOB's Anggor field at approximately 12 mmcfd during the first half of 2008 to PT Energasindo Heksa Karya at the price of $ 4.8/mmbtu with a perice escalation of 3 percent every year, EMP added.

Total gas volume contracted under the HGSA is 28 BCF until 2015.

Earlier, EMP's VP Capital Markets Herwin Hidayat said that the company's current price for gas sold to industries is around US$2.7-2.8 per MMBTU.

EMP through its subsidiaries controls 50 percent of Kangeen PSC, wholly owns Korinci Baru PSC and has a 50 percent stake in Gebang JOB PSC. (denny)