PLN still negotiating gas price from Sengkang

State utility company PT PLN said it is still negotiating the purchase price of gas from Sengkang LNG plant in South Sulawesi, which is facilitated by upstream oil and gas regulator BPMIGAS, PLN?s Gas and Fuel Division Head M. Suryadi Mardjoeki said.

He said the gas price from well-head at Sengkang PSC, in accordance with PoD, was at US$4-5 per MMBTU. Therefore, the gas price to be purchased by PLN would be gas price at well-head plus the cost for liquefaction.

"It is still being negotiated," Suryadi said.

PLN is seeking to purchase gas volume of 70 MMSCFD from the Sengkang LNG plant, with length of contract of seven to eight years, starting from end 2013.

LNG from Sengkang LNG plant will be supplied to eastern Indonesia power plants, such as the ones in Pomalaa and Halmahera.

The Sengkang LNG plant is being developed by ASX-listed firm Energy World Corporation (EWC) and expects to become onstream in June 2013.

Gas for the LNG plant will come from Sengkang PSC, which is operated by the company?s wholly-owned subsidiary, Energy Equity Epic Sengkang (EES).

Suryadi also said that PLN is also negotiating to secure LNG from Total?s Mahakam PSC with a volume of between 60 to 90 MMSCFD. PLN is negotiating with both Pertamina and Total E&P as Total?s contract to develop Mahakam PSC will expire in 2017.

PLN also expects to obtain additional gas supply of 3-5 MMSFD from Bentu PSC in offshore Riau, being developed by PT Energi Mega Persada (EMP). ?We expect to sign Heads of Agreement on October 27. We expect gas to flow (from Bentu) at end 2012,? he said.

EMP has 100 percent interest in Bentu PSC. (bernard)