PGN, Santos set to sign GSA agreement today

State owned gas distribution company Perusahaan Gas Negara (PGN) and gas producer Santos (Madura Offshore) Pty. Ltd are set to sign a gas sales agreement (GSA) today, Bisnis Indonesia reported on Tuesday.

PGN's president director WMP Simandjuntak said in Jakarta on Monday that under the GSA agreement worth about US$800 million, PGN would receive 100 million cubic feet per day of gas supply from Santos' Maleo gas field located off the coast of Madura island.

"The contract worth about $800 million will last for 12 years beginning August this year," he was quoted as saying. The price of the gas has been fixed at US$2.24 per million metric British Thermal Unit (MMBTU).

Simandjuntak said that the contract agreement would also cover the use of PT Trans Java Pipeline's gas pipeline that would transmit the gas from Santos' gas field to PGN's gas receiving terminal.

The additional gas supply from Santos will be used by PGN to cover the decline in the gas supply from other gas providers Pertamina and BP ONWJ. (*)