PGN will sign two gas contracts worth $1.25 billion

State gas distribution company PGN will soon sign new gas purchasing contracts worth about US$1.25 billion or about Rp 11.37 trillion with Santos and Kodeco to meet the growing gas demand from household and corporate buyers in East Java, Investor Daily reported on Thursday.

“We are optimistic that the new contracts could be signed before the end of this month,” PGN’s president director, WMP Simanjuntak, said in Jakarta on Wednesday

Under the contracts, PGN will receive gas supply of about 100 million cubic feet per day (MMSCFD) from Santos for eight years, and another 50 million cubic feet per day from Kodeco, beginning early 2005.

With the new gas supply, PGN hopes that it will be able to fulfill the shortage of the gas supply as the result of the cut in the gas supply from Terang Sirasun gas field. The gas supply from this field is currently used to meet the gas need of the state owned electricity company PLN.

PGN has recently signed a number of gas purchasing contracts with several oil and gas producers, including Medco E&P Internasional and ConocoPhillips. Under the US$3 billion contract with Medco, PGN will get gas supply for 20 years from the company’s Senoro Toili gas field in Central Sulawesi.

Meanwhile, under the US$4.3 billion contract with ConocoPhillips, PGN will receive gas supply from Koridor bloc in South Sumatra, he said. (*)