PLN needs liquidity guarantee of Rp5 trillion for Grati?s gas supply

State power company PLN has asked the government and Bank Indonesia (Central Bank) to provide liquidity guarantee of Rp5 trillion (US$=Rp8,830) for gas supply contract to its power plant in Grati, East Java.

PLN president director Eddie Widiono Suwondo said Monday Australian oil and gas firm Santos Limited had required the liquidity guarantee for gas supply from its Oyong field in East Java to the 700-megawatt power plant.

Santos Limited, through its wholly owned subsidiary Santos (Sampang) Pty Ltd early this year entered into a Head of Agreement with PLN?s PT Indonesia Power for the sale of the entire gas reserves of the off-shore Oyong field.

Santos had said previously that first gas supplies from the Oyong field were expected to commence under the gas sales agreement in late 2004, with a minimum of 60 million cubic feet per day of gas being delivered to Grati. (godang)