Update 2: Indonesia won?t export more gas through pipeline: Purnomo
Thursday, March 1 2007 - 08:01 AM WIB
Indonesia will not export more natural gas through pipeline as the country is focusing on fulfilling domestic demand for the commodity, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Thursday.
?We shall not accept orders (for more natural gas exports) through pipelines from Singapore and others,? Purnomo said in a discussion.
Indonesia currently exports natural gas through pipeline to Singapore and Malaysia from gas fields in Natuna Sea and to Singapore from Sumatra. From Natuna Sea, Indonesia pipelines gas to Singapore?s Sembawang Gas Corporation and Malaysia?s Petronas. From Sumatra, Indonesia exports gas pipelines gas to Power Gas Singapore.
U.S. firm ConocoPhillips, the major gas producer in Sumatra, has also signed a gas sales and purchase agreement with Island Power Singapore. Under the agreement, the American firm will pipeline gas to Island Power at the rate of 110 million cubic feet per day (MMCFD) for 15 years starting in 2006. But, gas delivery to Island Power has yet to be executed, because the Singaporean firm had reportedly yet to get clearance from Singaporean authorities for the transaction.
Purnomo said Indonesia would honor the existing contracts for gas delivery through pipeline with the Singapore and Malaysian companies but would not accept orders for more natural gas.
He however did not specify if there were orders for more natural gas from both countries and the sales agreement with Island Power was categorized as new order.
One of the gas producers in Natuna that export gas to Sembawang is British firm Premier Oil Plc, which said on its website last year that it was in negotiations for sale of more gas to Singapore. Purnomo earlier said the government had asked the firm to send its additional gas to Batam, promising the firm will get a higher production share to compensate the lower price it will get from buyers on the industrial island.
Meanwhile, Edi Purwanto, deputy chairman for marketing affairs at oil and gas upstream regulator BP Migas, told Petromindo on Thursday that ConocoPhillips had yet to deliver gas to Island Power because the latter had yet to fulfill all conditions for the gas delivery to be carried out.
?We are waiting for a clarification from Island Power. But, we can wait for too long. If the company fails to meet the conditions, we shall unilaterally terminate the contract,? Edi said, without specifying the conditions.
If the contract is cancelled, analysts say state owned gas transmission and distribution company PT PGN will have more gas reserves to distribute through its South Sumatra-West Java pipeline which is about to be completed.
PGN?s president director Sutikno earlier told Petromindo that the company is ready to absorb any potential additional supplies coming from Sumatra?s gas fields. (Godang/Alex)