Sembcorp, Premier sign gas supply deal

Singapore Exchange-listed firm Sembcorp Industries Ltd (Sembcorp) announced on Saturday that Sembcorp Gas, a subsidiary of its wholly owned Sembcorp Utilities, has executed a Heads of Agreement (HoA) with Premier Oil Indonesia on November 16, 2007, for the importation of 90 billion British thermal units (BBtu) per day of natural gas at plateau from Premier Oil-operated Natuna Sea Block A Offshore Indonesia.

According to the company, Premier will be providing gas initially from the Gajah Baru discovery, with subsequent gas supply most likely from subsea developments at Naga and Iguana. This is to augment the 341 BBtu per day which Sembcorp Gas contracted for in 1999 supplied by the West Natuna Group of which Premier Oil is a member.

The gas is primarily intended to be utilised by Sembcorp Utilities for process use and production of steam to meet growing demand in the Jurong Island petrochemical complex.

Some quantity of gas is also expected to be consumed by industrial and chemical customers.

The gas will be piped from the West Natuna Sea through the existing West Natuna Transportation System pipeline to Sembcorp's Receiving Terminal located at Sakra, Jurong Island.

The parties have been in discussion since 2004 and a fully termed Gas Sales Agreement is expected to be concluded by the first quarter of 2008 for delivery of gas to commence in 2010, the company said. (alex)