Pertamina and Singapore's firm to sign gas deal soon
Friday, November 10 2000 - 04:00 AM WIB
State oil and gas company Pertamina is expecting to soon sign the final deal with the Singaporean firm Gas Supply Private Limited which will allow the former and its contractors to supply natural gas from South Sumatra to Singapore.
"Our target is to sign the agreement on November 15," Pertamina's exploration and production director Gatot K. Wiroyudo told Petromindo.Com on the sidelines of the meeting between Pertamina and the House of Representatives' Commission VIII, which oversees mines and energy affairs.
He added that negotiations had thus far been running smoothly despite remaining disagreement between Pertamina and state gas distribution company Perusahaan Gas Negara (PGN) on the gas transportation fee.
PGN will build a 400-kilometer pipeline linking South Sumatra to Singapore for the transmission of the gas.
Gatot said PGN asked for 68 U.S. cents per million British thermal unit (MMBTU) in transportation fee, while Pertamina offered 65 cents per MMBTU.
Pertamina and Gas Supply Private Limited, a wholly owned subsidiary of PowerGas Ltd, initialed a detailed gas sales agreement on August 29, 2000.
Despite the disagreement with PGN, Pertamina was optimistic it would sign the final agreement together with the supporting agreements, including the one on gas supply and transportation, by Nov. 15, Gatot said.
This agreement will be the second gas agreement signed by Pertamina and the Singaporean company.
The first agreement between Pertamina and Singapore's Sembawang Gas was signed last year. Under the first agreement, Pertamina and its contractors will send natural gas from the West Natuna area in the South China Sea to Singapore.
This gas for Gas Supply Private Limited will be supplied from three production-sharing contracts (PSCs) in Sumatra, which are respectively being operated by Gulf Indonesia Resource Grissik, Santa Fe Energy Resources Jabung and Gulf Indonesia Resources South Jambi.
Pertamina and the three PSCs will supply 150 million cubic feet per day (MMSCFD) of gas beginning in 2003 and increasing to a peak rate of 350 MMSCFD for a total contract period of 20 years.
Investment for the project is estimated at US$1 billion, including $700 million for the construction of the underwater pipeline linking Sumatera and Singapore. (alex)