Pertamina, Petronas sign heads of gas sales agreement

Indonesian state oil and gas company Pertamina and Malaysian state oil and gas company Petronas signed on Thursday the heads of agreement for the supply of natural gas from the West Natuna area in South China Sea to Malaysia.

The heads of agreement was signed by Pertamina's president Baihaki Hakim and Petronas' president Tan Sri Mohamad Hasan Marican.

Under the 20-year gas sales agreement, Pertamina will supply Petronas with a total of 1.5 trillion cubic feet (TCF) natural gas extracted from the Block B gas block owned by a consortium led by Conoco Inc of the United States in partnership with Texaco also of the U.S. and Inpex of Japan.

The first gas is expected to arrive in Malaysia in 2002.

Baihaki said in his speech during the signing ceremony all parties involved in the project would invest a total of US$2.5 billion to build gas production facilities at the Block B gas block and underwater pipeline stretching from West Natuna to the Duyong platform in Malaysia.

Pertamina and Petronas have yet to complete another seven agreements, including gas sales agreement, gas transportation agreement, gas coordination agreement, gas delivery agreement, supplier's agreement, buyer's agreement, and trustee and paying agent agreement, Baihaki said. (godang)