Medco sells gas from S. Sumatra field to Chevron

Upstream unit of IDX-listed energy firm PT Medco Energi Internasional Tbk said it has agreed to sell gas from its Singa gas field in Lematang PSC, onshore South Sumatra to Sumatra crude producer Chevron Pacific Indonesia (CPI).

PT Medco E&P Indonesia President Director Budi Basuki told Petromindo.com on Tuesday that Singa gas would be sold to CPI through IDX-listed state gas distribution firm PGN.

?We?re currently finalizing the GSA,? he said, adding that gas from Singa field would likely to start flowing end of this month or next month.

Under the deal, CPI will receive 50MMCFD of Singa gas for three years. BUdi said Medco would sell gas to PGN at above US$4 per MMBTU. He did not disclose PGN?s selling price to CPI. Gas will be supplied through PGN?s Sumatra pipeline network.

CPI, a unit US giant Chevron Corp. that runs Indonesia?s biggest oil fields in Central Sumatra, had been suffering from gas supply shortage, which cost the company production opportunity loss of 8,000 barrels per day in 2009 and more next year. CPI uses gas to lift crude at Duri steamflood facilities.

Medco has clinched deal to supply 50MMCFD of PLN?s power plant in West Java for 9 years, but PLN is not able to immediately offtake Singa gas due to capacity constraint at Sumatra to Java pipeline, from which Singa gas would be transported to West Java. (bernard)

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