Premier Oil signs transportation agreement for West Natuna gas

UK oil, gas firm Premier Oil PLC said a fully termed Gas Transportation Agreement (GTA) for gas sales from West Natuna Sea Block A PSC area to Singapore had been signed on Monday and further agreements for the gas deliveries to Batam island are expected to follow shortly.

Premier had signed in April 2008 three Gas Sales Agreements (GSAs) to supply gas from Block A to Sembcorp Gas Pte Ltd (Sembgas) in Singapore, and PT Perusahaan Listrik Negara (PLN) and PT Universal Batam Energy (UBE), both are located in Batam island.

According to the company, the newly signed GTA provides contractual rights to transport gas in excess of the delivery volumes. The GTA was agreed among all of the West Natuna Transportation System (WNTS) pipeline partners.

The WNTS pipeline is greater than 600 kilometres in length, for the most part has a 28 inch diameter and carries gas from three Indonesian PSC concession areas (Block A, Block B and Kakap) to Singapore. The WNTS is expected to be expanded to include a spur line to Batam Island.

?The signing of this key agreement, which was a condition to the earlier signed GSA, will allow commencement of our project that will provide first gas to Batam and Singapore targeted for 2010. We are also very pleased to be making important progress on GTAs for both our Batam gas customers and these are expected to follow shortly,? CEO Simon Lockett said.

The Block A PSC partnership comprises Premier (28.67%) as Operator with Kufpec (33.33%), Hess (23%) and Petronas (15%). (alex)