Release: Medco: Signing of LNG project Framework Agreement

(Jakarta, May 22, 2007) PT Medco Energi International would like to inform you that on May 10, 2007, the company entered into framework agreement with PT Pertamina and Mitsubishi Corp in relation to the potential development of a liquefied Natural gas (LNG) project in Sulawesi.

 

The LNG project plans to utilize gas reserves from the Senoro field in Senoro block which is operated by a joint operating body between MedcoEnergi’s wholly owned subsidiary, PT Medco E&P Tomori Sulawesi and Pertamina (Pertamina-Medco Tomori JOB) and gas reserves from the Donggi, Matindok, Maleo-Raja and Minahaki fields in Matindok block which operated by PT Pertamina EP. The gas reserves from Senoro filed as of January 1, 2003 were certified by Gaffney Cline and Associates (GCA) as stated on their report dated April 23, 2003.

 

The framework agreement completes the negotiation of further agreements between the parties and the formation of a company to own the LNG plant and associated facilities. It is proposed that Mitsubishi owns 60% of the shares in the company, and Medco Energi and Pertamina will each own 20% of the shares.

The LNG project will be structured as downstream project, where the project company will purchase clean natural gas from upstream gas suppliers, which are JOB Pertamina –Medco Tomori and Pertamina EP, liquefy the natural gas into LNG and sell and deliver LNG to buyers. The LNG plant is anticipated to have a production capacity of approximately 2 million ton per year, subject to further design and engineering work.

The Management of MedcoEnergi is looking forwards this project to contribute to MedcoEnergi’s consolidated revenues in the coming years. This framework agreement will not affect the consolidated financial statement of MedcoEnergi for the current year.(end of edited release)