Medco, PLN to sign MOU on gas supply to Madura?s Gili power plant

Australian-based CityView Corporation Limited said on Friday PT Medco Energi International is confident to secure a memorandum of understanding for gas supply from Medco-operated Madura block to the Gili power plant on Madura Island by the end of June 2004.

?Operator has advised that it has had discussions with the national power company PLN,? CityView said in a statement to the Australian Stock Exchange.

According to CityView annual report 2003, the power market on Madura represents a ready opportunity for sales of up to 16 million cubic feet per day.

The report said a ten-year volume commitment or about approximately 80 billion cubic feet (BCF) of gas reserves would likely be required by the 40-megawatt proposed power plant.

"The central fault block of the Sebaya prospect is estimated to contain about 155 BCF of recoverable gas, more than enough for the existing power market," the report said.

Medco had also obtained a confirmed one-year extension for the relinquishment of the Madura Block from the relevant Indonesian authorities, CityView said.

CityView added that Medco had completed the land acquisition for the drill site and was currently finalising the various contracts for the drilling of the proposed delineation well, Sebaya # 2.

?The work program and budget for the drilling of a second proposed delineation well on the Sebaya prospect, which is contingent on the success of Sebaya #2 is also being prepared,? CityView said.

State oil and gas firm PT Pertamina has a 35 percent interest in the Madura block, while CityView, Medco and Falcon Oil Pte. Ltd hold 16.25 percent, 24.75 percent and 24 percent, respectively. (robert)