PLN and nine gas suppliers reach agreement on prices

State owned electricity company PLN and its nine gas suppliers including Amerada Hess, Santos, BP West Java, BP Muria, CNOOC, Exspan, Kodeco and Conoco Philips have reached agreements on sales purchases contracts, Bisnis Indonesia reported on Friday.

PLN?s director for power generation and prime energy Ali Herman Ibrahim said in Jakarta on Thursday that the sales purchase-sale contracts would be signed in Bali on July 19 (Saturday).

Under the sale-purchase contract agreement, Amerada Hess will supply gas of up to 140 million cubic feet per day (MMCFD) at a price of US$2.38 per MMBTU, Santos to supply 50 MMCFD at a price of US$2.515 per MMBTU, BP West Java with 260 MMCFD at a price of US$2.45-US$2.5 per MMBTU, BP Muria with 120 MMCFD at a price of US$2.45 per MMBTU, CNOOC with 120 MMCFD at a price of US$2.67 per MMBTU, Exspan with 20 MMCFD at a price of US$2.4 per MMBTU, Kodeco with 100 MMCFD at a price of US$2.45 per MMBTU and ConocoPhilips with 400 MMCFD at a price of US$2.45 ? US$2.5.

Herman said that besides those from Exspan and Santos, the gas would be supplied to PLN?s power plants in Java. ?Santos and Exspan will supply power plants in Sumatra,? he added.

PLN said last week the signing of the sale-purchase contracts might be postponed after some of the gas suppliers required it to provide standby Letter of Credit to guarantee the gas purchase.

Amerada Hess and Santos, for example, had required PLN to provide standby LC of US$220 million and US$329 million, and US$150 million.

But Herman said that these two companies had been more flexible about the L/C requirement. ?They have told PLN not to worry much about the L/C requirement,? he said. (*)