Regional LNG: Petronas signs gas supply agreement with Murphy Oil

Malaysian state oil and gas company PETRONAS announced Monday it has signed two gas sales agreements (GSA) with Murphy Oil and PETRONAS Carigali Sdn Bhd for the supply of gas from the fields in Blocks SK309 and SK311, and from the Kikeh field, offshore Sarawak and Sabah respectively.

Under the agreements, Murphy Oil and PETRONAS Carigali as sellers will supply 250 million standard cubic feet per day (mmscfd) of gas from the two blocks to the PETRONAS LNG Complex in Bintulu for an initial firm period of five years, with a provision to supply up to 350 mmscfd for another 10 years.

The sellers also agreed to supply 120 mmscfd of associated gas from the Kikeh field, which is in the deepwater Block K, to the PETRONAS Methanol plant in Labuan for an initial firm period of four years, and to continue the supply thereafter until the depletion of the field's reserve.

The gas delivery from Blocks SK309 and SK311 is targeted to commence within the first half of 2009, while that from Kikeh is expected in January 2008. Murphy Oil as operator holds 85% equity interest in each of Blocks SK309 and SK311, and an 80% interest in Block K. PETRONAS Carigali owns the remaining equity interests in the three blocks.(alex)