Total asked to soon sign gas agreements with PGN

BPMIGAS, regulatory body for oil and gas upstream operation, has asked Total E&P Indonesie to immediately sign agreements needed for the supply of its gas to a LNG receiving terminal which will be built by PGN and Pertamina in West Java.

BPMIGAS chairman Priyono said in Jakarta Thursday evening that the agreements should be signed in the first semester of this year to ensure that the LNG receiving terminal could be built according to the schedules.

He said that the Head of Agreements should be signed in the next three months, while the sales and purchases agreement should be inked in the next six months so that the development of the LNG receiving terminal could be begun this year as originally planned.

Total has signed a memorandum of understanding to supply 11.75 million tonnes of LNG to the receiving terminal to be built by state oil and gas company PT Pertamina (Persero) and PLN for 10 years from its Mahakam gas field.

According to PGN, Total said that it would go ahead with its plan to supply the terminal on the condition the government approves the extension of its contract over the gas block which will end 2017.

Total has yet signed the follow-up agreements because the government has not yet approved the contract extension.

?Total is allowed to ask for the extension of the contract, but it is the right of the government to approve or not to approve it,? Priyono said, adding that Total?s agreement to supply the LNG receiving terminal should not be linked with the contract extension.

PGN said that the signing of the HoA and Sales Purchase Agreements for the supply of gas from Total?s Mahakam field would be quite important for the commencement of the gas terminal.

?The agreements are also important for us to be able to obtain loans from banks,? PGN president director Hendi Priyo Santoso. (*)