Malaysian gas deal may be inked early next year

Negotiation between Malaysia?s Petronas and Pertamina and South Sumatra gas producers to supply natural gas from South Sumatra to peninsular Malaysia starting 2005 is well underway and gas sales agreement (GSA) is expected to be sign early next year, according to a source.

?The only big issue remained to be negotiated in this deal is the price of gas. But the difference is narrowing down, and I think GSA could be inked by January next year, ? said the source who is familiar with negotiation process.

Under the deal, natural gas will be flowed starting 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 supply of 2.19 trillion cubic feet of gas for the period of 20 years.

73.3 percent of the natural gas will be supplied from ConocoPhillips-operated Suban gas field in Corridor Block production sharing contract (PSC), while the remaining 26.7 percent will be supplied by Santos-operated Bentu PSC and JOB Pertamina-YPF Indonesia Jambi Merang, all of which are located in the southern part of Sumatra.

Gas will be piped through partly through existing pipeline belongs to PGN?s subsidiary Transgasindo that would connect South Sumatra to Singapore in 2003 and another 60-kilometers pipeline will be built from Pemping Station to Tanjung Piai. (alex/godang)