Signing of PGN-Santos contract might be cancelled

State owned gas distribution company Perusahaan Gas Negara's (PGN's) plan to sign a gas purchasing contract worth about US$900 million with gas producer Santos might be cancelled, Investor Daily reportd on Friday.

PGN's president director WMP Simanjuntak said that the signing of the contract which would allow the company to get a gas supply of 100 million cubic meters per day for eight years from Santos gas field could be delayed because PGN opines that the terms and conditions proposed by Santos would be too "hard" to meet.

He said, however, the cancellation of the contract would not affect the distribution of gas to PGN's customers.

"We will use the gas supply of around 100 million cubic meters per day from Lapindo Brantas and another 50 million cubic meters from Kodeco per day to meet the gas demand from the customers," he said

He said that PGN would also receive additional gas supply from a number of gas fields which are now under development in East Kalimantan as well as from Terang Sirasun gas block is East Java which is also now under expansion. (*)