Pertamina, Petronas initialize S. Sumatra-Malaysia gas deal

State oil and gas company Pertamina and Malaysia national oil company Petronas, together with Gulf Indonesia Resources (GIR) and other South Sumatra gas producers had initialized memorandum of understanding (MoU) for the supply of natural gas from South Sumatra to Tanjung Piai in Johor, Malaysia.

Under the MoU, natural gas will be flowed to Malaysia starting fourth quarter of 2005 at an initial rate of 100 million standard cubic feet per day (MMCFD) ramping up to 300 MMCFD after one year. The deal will call for supply of 2.19 trillion cubic feet of gas for the period of 20 years.

A release from Gulf Indonesia Resources said that the parties to the MoU are targeting to complete the full gas sales agreement before the end of 2002.

73.3 percent of the natural gas will be supplied from Gulf Indonesia Resources-operated Suban gas field in Corridor Block production sharing contract (PSC), while the remaining 26.7 percent will be supplied by Santos-operated Bentu PSC and JOB Pertamina-YPF Indonesia Jambi Merang, all of which are located in the southern part of Sumatra.

The MoU will formally be signed in Bali on August 8, together with the ceremony of the first flow of gas from West Natuna Block B to Malaysia, said Trijana Kartoatmodjo, a senior Pertamina official in charge of gas sales negotiation.

Trijana said gas will be piped through partly through existing pipeline belongs to PGN?s subsidiary Transgasindo that would connect South Sumatra to Singapore in 2003 and another 60-kilometers pipeline will be built from Pemping Station to Tanjung Piai.(alex)