PGN may buy ConocoPhillips' Sumatra gas instead of PLN

U.S. oil firm ConocoPhillips may sell natural gas from its South Sumatra field to Indonesia gas distribution firm PT Perusahaan Gas Negara (PGN) instead of PT Perusahaan Listrik Negara (PLN), Indonesia oil and gas watchdog BP Migas said.

PLN has put on hold a deal to buy gas from ConocoPhillips due to unresolved issues, including the payment process.

"PGN and ConocoPhillips are in talks to buy gas from South Sumatra. ConocoPhillips has to prepare another possible buyer if the deal with PLN fails," BP Migas vice chairman Kardaya Warnika told reporters on Friday.

"ConocoPhillips has to award a contract for developing the field. The deadline is August 1. There is a high risk of high costs if the deadline is not met. Therefore, we have to have a contingency plan that looks for anther buyer," Warnika said.

ConocoPhillips officials could not be immediately reached for comment.

Warnika reiterated that ConocoPhillips and PLN had agreed on an average price of $2.69 per million British Thermal Units, adding that the agreement would be signed in May.

The natural gas was to be delivered via a pipeline that would be built by PGN in 2006. The gas will supply PLN generators in West Java.(*)