Pertagas, Pertamina reach agreement on LPG supply

The consortium comprising PT Pertagas and South Korean firm Samtan Corp. has a reached an agreement with state owned oil and gas firm PT Pertamina on LPG supplies from a natural gas liquid (NGL) plant in South Sumatra.

Pertagas is a wholly owned gas disribution unit of Pertamina.

"The negotiation has been done. The Pertagas consortium has agreed to sell LPG to Pertamina at the rate of 700 tons per day over a period of 13 years starting 2013," Pertagas's president director Gunung Sardjono said on Monday.

He did not specify the price paid by Pertamina for the fuel.

Pertagas earlier said that the US$192 million NGL project is expected to be completed in 2012. It is designed with a production capacity of 150 tons per day (TPD) of excess propane, 2,150 TPD of condensate and 546 TPD of LPG. The plant will get gas supplies from fields owned by Pertagas's sister company PT Pertamina EP and Medco EP, a subsidiary of Jakarta-listed PT Medco Energi International.

Initially, Pertagas teamed up with South Korean firm E1 Corp. to develop the project but in June last year, the South Korean firm told Pertagas that it had sold its 34 percent stake to Samtan. (Bernard)