PGN will finalize GSPAs with Santos and Kodeco this month

State gas utility PT Perusahaan Gas Negara (PGN) is optimistic that it will sign two Gas Sales and Purchase Agreements (GSPAs) with Santos (Australia) and Kodeco Energy (South Korea) by the end of October 2004, the Investor Daily Indonesia newspaper reported in its Friday edition.

?Almost 99 percent of the negotiations are completed with Santos. Hopefully, we will sign GSPA (with Santos) by end of October 2004, ? PGN?s business director Nur Subagyo Prijono said in Jakarta on Thursday.

Recently, PGN president director WMP Simandjuntak said the difference between PGN and Santos had been settled.

?They were forced to drop two matters, which were considered as very sensitive in the beginning. The issue was a guarantee of Santos investments in Indonesia by the government, ? Simandjuntak said.

The daily didn?t mention the second issue in its report.

According to Prijono, PGN have agreed with Kodeco on the price of volume of gas to be supplied by the latter. Both have signed a Head of Agreement under which PGN will buy 50 million cubic feet per day (MMSCFD)of gas from Kodeco for 7 years. Meanwhile, a contract with Santos will involve 100 MMSCFD of gas supply over a period of 8 years. Both the contracts have a value of US$1.2 billion.(*)