PGN eyes Cepu gas production

State owned gas distribution company PT Perusahaan Gas Negara (PGN) is negotiating with ExxonMobil on the possibility of obtaining gas supply from the American company's Cepu oil bock in East Java, Kompas reported Monday.

PGN's president director WMP Simanjuntak said in Jakarta Saturday that PGN had offered to cooperate with ExxonMobil in taking the advantage of the company's gas reserve in the Cepu oil block.

"We hope the first delivery of gas from the Cepu oil block can be made before the end of 2008," he was quoted as saying.

Meanwhile, Maman Budiman, ExxonMobil's vice president external relations, confirmed in Jakarta Saturday that the American company was still intensively negotiating with several prospective buyers of the company's gas including PGN.

"In addition to PGN, Exxon has also talked with PT Petrokimia Gresik," Maman said. But he said that the company had yet not decided when the gas production at the Cepu block would be started because the company was at present concentrating on oil production. He also said that the gas in question would be associated gas, which is a by product of oil production.(*)