PLN asks Amerada Hess to shorten blanket guarentee period

The state-owned electricity company PT Perusahaan Listrik Negara (PLN) has asked the production sharing contractor Amerada Hess to shorten the period of the standby letter of credit (SBLC) blanket gurantee for its gas sale to the state firm, PLN?s director for power generation and primary energy Ali Herman Ibrahim said on Tuesday.

?PLN has asked (Amerada Hess) to shorten the SBLC period to four months,? Ali Herman told Petromindo.Com.

In July this year, Amerada Hess, the operator of the Ujung Pangkah block offshore East Java, signed a $1.2 billion agreement to supply around 100 million cubic feet per day (MMCFD) of gas to PLN?s power plant in the province starting 2005.

According to Ali Herman, Amerada Hess asked for $80 million SLBC so that its investment is secured.

But, it is not yet clear whether Amerada Hess will agree to PLN?s request or not.

Ali Herman also said that production sharing contractors BP Offshore Northwest Java (ONWJ) and ConocoPhillips had agreed to shorten the period of PLN's SBLC to four months from one year initally proposed by both firms.

ConocoPhillips is expected to supply gas to PLN?s power plants in the western part of Java starting in 2006 at the maximum rate of 100 MMCFD from its Corridor block in South Sumatra, while the deal with BP ONWJ is contract renewal to supply 265 MMCFD of gas to PLN?s power plants in Jakarta starting 2004. (godang)