Santos expects to sign gas deal with PGN
Tuesday, December 7 2004 - 10:43 AM WIB
"We are hoping to sign the gas sales agreement with PGN this Dec. 12. It includes payment security as well," Santos Indonesia general manager Chris Newton was quoted by Reuters as saying.
He said Santos would supply PGN with 100 million cubic feet (2.83 million cu meters) of gas per day, which PGN would distribute to customers in East Java province.
A PGN official, who declined to be identified, said the Indonesian gas distributor was still negotiating with Santos over some details while the gas supply period was expected to be less than 10 years.
Separately, Newton said Santos was still negotiating with state-owned electricity company, PT Perusahaan Listrik Negara (PLN), over a natural gas supply deal that had been delayed by disagreement over payment guarantees Santos wanted from PLN.
"We are working with them (PLN) on a solution. We have significantly reduced our payment security requirements. But we still do have some requirements," Newton said.
"It is up to them. If they come up with a reasonable solution, they will have gas supply, if they don't there will be no gas supply."
A PLN official has said the firm badly needed the gas from Santos to supply its power plant in East Java.
PLN signed a deal in 2003 under which Santos would supply between 40 million and 60 million cubic feet of natural gas per day for 10 years starting from 2005, but the dispute could get in the way of implementation.
The gas is destined for an 800-megawatt power plant in Grati, East Java, which is currently using fuel oil. (*)