PGN hopes to close Mahakam gas supply deal Oct

IDX-listed state gas distribution firm PT Perusahaan Gas Negara(Persero) (PGN) together with its partner state oil, gas company PT Pertamina (Persero) expect to be able to sign LNG Sales Purchase Agreement with Indonesian unit of French giant Total SA for its proposed floating LNG receiving terminal in Jakarta in October this year.

PGN Head of Gas Supply Gamal Imam Santosa told Petromindo.Com that both parties are now in the process of negotiating terms and conditions including the price of LNG.

Total and is partner in Mahakam Block Inpex Corp. have agreed to supply 11.75 million tonnes of LNG for 10 years. Gas from Mahakam block would be turned into LNG at Badak LNG plant and shipped to the consortium?s LNG receiving terminal that is scheduled to start commercial operations in late 2011 or early 2012. The terminal will be built with capacity to process 3 million tonnes of LNG per annum.

State electricity firm PT Perusahaan Listrik Negara (Persero) (PLN) will offtake most of gas from the receiving terminal to fuel its power plants in Jakarta area.

The consortium has opened EPC tender for the project and according to Gamal, more than 10 interested contractors have submitted bid documents.

He further said that thus far the consortium is still unable to decide on the price of gas offered to PLN. ?We are still calculating the costs components and margin,? he said. (godang)