Pertamina, PLN sign gas agreement

State oil and gas company Pertamina has signed a memorandum of understand with state electricity company PT PLN for the supply of gas to the latter's Tambak Lorok power plant in Semarang, Central Java.

The MOU was signed on Thursday in East Java Province's capital of Surabaya, head of general affairs at Pertamina's directorate of production sharing management Sidick A. Nitikusuma said in a statement on Friday.

Under the MOU, Pertamina will supply the power plant,which now uses diesel oil as fuel, with 160 million British thermal unit (MMBTU) of gas per day from the Kepodang field of the Muria block starting from 2004.

He however did not specify the period of the contract.

The block, which is jointly operated by Pertamina and Anglo American energy giant BP Plc, is located 50 kilomters north of Jepara in the border areas of Central Java and East Java, according to Sidick.

The gas will be delivered through a 205 kilometer underwater pipline, whose construction will be started in 2002 or 2003, Sidick said.

A total of US$350 million will be invested to build the pipepline as well the onshore receiveing terminal near the power plant.

The construction works will absorb 1,000 workers, he added.

According to Sidick, Pertamina and BP have discovered a gas reserve of 600 billion cubic feet in the Muria block. (Bodega)