Indonesia Power to sign gas deal with Santos’ Oyong field next month

PT Indonesia Power (PTIP), a subsidiary of state-owned electricity firm PT PLN, said Tuesday a Gas Sales and Purchase Agreement with Australian oil and gas company Santos Limited on gas supply for the Grati power plant could be signed by early June.

PTIP’s development and marketing director Bambang Isti Eddy told Petromindo.Com that both parties were expected to complete the conditions for the contract by end of May.

The Oyong field is estimated to contain in excess of 90 billion cubic feet of recoverable gas. In February 2003, PTIP and Santos entered into a Heads of Agreement (HoA) for the sale of the entire gas reserves of the Oyong field to the 766 MW open and combined cycle gas turbine Grati power plant, which is located about 60 kilometers southwest of the field.

Bambang said construction of the pipeline connecting Oyong and Grati would last for 18 months after the contract signing and first gas delivery is expected to take place by end of 2006.

Bambang added the gas supply capacity from Oyong is estimated between 40 and 60 million cubic feet per day.

Santos, together with its partners, is currently constructing the platform for the field and is expecting to start oil production in the field in the third quarter of 2005. Solution gas associated with the early oil production will be reinjected until gas delivery to the Grati begins. (dino)