Pertamina, Medco signs HoAs for Central Sulawesi gas

State owned oil and gas company PT Pertamina and publicly listed firm PT Medco Energi Internasional signed on Friday two heads of agreement (HoA) for the sale of gas from their fields in Central Sulawesi.

Pertamina E&P, the usptream arm of Pertamina, signed an HoA with PT Donggi Senoro LNG (DSNLG) to supply 85 MMSCFD of gas for 15 years a planned LNG plant in Central Sulawesi. The gas will be sourced from Matindok block, owned by Pertamina.

The Pertamina-Medco JOB with DSNLG to supply 250 MMSCFD of gas for a period of 15 years to the Central Sulawesi LNG plant. The gas will be sourced from the Senoro block jointly owned by Pertamina and Medco.

"The two HoAs involve the supply of a total of 1.7 trillion cubic feet of gas worth US$16 billion at the crude price of $100 per barrel over a period of 15 years," oil and gas regulatory body BPMIGAS's chairman R. Priyono said.

At the Japan Crude Cocktail (JCC) of $100 per barrel, the price of gas delivered from "upstram to downstream" will be $9.75 per million British thermal unit (MMBTU) and at the JCC of $120, the price will be $12.15 per MMBTU, according to Priyono.

At the JCC of $100 per barrel, the transactions will generate $9.3 billion in tax and non-tax revenue plus a a downstream bonus amounting $800 million for the government. At the JCC of $120 per barrel, the government will get $12 billion in revenue, according to Pertamina's Vice President Director Iin Arifin Takhyan.

The LNG will be offered to buyers at "market price", Iin said, adding that the negotiaton with buyers was still in progress.

Japanese firms Kansai Electric and Chubu were interested to buy the LNG at a total volume of 2 million tons per year, he said.

DSNLG comprises Pertamina, Medco and Japanese firm Mitsubishi Corp. DSNLG will operate the 2-MTPA LNG plant that will be built in the region. (Bernard/Godang)