Petronas, Pertamina gas deal seen by April

Malaysian and Indonesian state-owned oil firms are expected to seal negotiations for a 20-year for the supply of gas from Indonesia's West Natuna by April, Malaysian energy minister Leo Moggie said on Friday.

"Petronas and Pertamina are continuing discussions and have targeted to complete negotiations in early April," Moggie told reporters after a meeting with Indonesian energy and mineral minister Purnomo Yusgiantoro in Malaysia's capital.

Under a pact signed in October, Petronas will buy up to 250million standard cubic feet (scf) of natural gas per day from Pertamina, with a total from Pertamina, with a total volume of 1.5.trillion scf over 20-year period.

The pact provides for an additional gas purchase of up to one trillion scf of gas from Pertamina under the same terms and conditions. The gas will be piped to Petronas' Duyong gas field facilities in Malaysia.

Moggie said initial gas delivery is planned to start in July 2002. He also said Indonesia and Malaysia had agreed to revive a coal-fired power plant project on Sumatra island that could be used to supply electricity to peninsulas Malaysia.

The project was first announced in 1997 but it was shelved a year later because of the Asian financial crisis.

"A joint steering committee will be set up to look into the development of the power plant," Moggie said.

Under the 1997 proposal, a consortium was to be set up and led by Malaysia's state-controlled utilities giant Tenaga Nasional Bhd and Indonesia's state-owned PT Perusahaan Listrik Negara (PLN).

Moggie said then that Indonesia had a big coal deposit in Cerentil, Central Sumatra, and that a coal-fired power plant, possibly with a capacity of 1,200MW could be built there.

He added that electricity from the plant would be supplied to Malaysia either via an undersea cable or via overhead cables strung along a bridge that the two countries have proposed to build between Sumatra and peninsular Malaysia. (*)