Update: Pertamina, Medco sign gas contract for Bunyu methanol plant

(Adds list of gas sales and purchase agreements signed on Tuesday)

State owned oil and gas firm PT Pertamina and PT Medco Energi International will start producing gas from South Sembakung field in Simenggaris PSC, which will allow the latter to resume the operation of the methanol plan on Bunyu island in East Kalimantan.

On Tuesday, PT Pertamina Hulu Energi (PHE) Simenggaris and PT Medco EP Simenggaris, which operate Simenggaris field through PHE-Medco E&P Simenggaris JOB, signed a gas sales and purchase agreement with PT Pertamina Gas (Pertagas) and PT Medco Gas Indonesia. Pertagas and Medco Gas will channel the gas to the Bunyu methanol plant.

It is one of nine gas sales and purchase agreements (see list) signed on Tuesday.

Under the 11-year contract, the PHE-Medco E&P Simenggaris will supply a total of 72,69 trillion British thermal unit (TBTU)worth US$215 million at the rate of 20 billion British thermal unit (BBTU) per day starting in the fourth quarter of 2011.

?The gas will be channeled through 10? x 55 km pipeline to be built by the consortium of buyers at a cost of between $25 million and $30 million,? Pertamina said in a statement.

?With the gas supply, we shall be able to resume production of methanol on Bunyu island,? Medco EP?s President Director Budi Basuki said.

The Bunyu methanol plant, owned by Pertamina but was operated by Medco, has been suspended for years due to the lack of gas.

With a gas supply of 20 BBTU per day, the methanol plant will be able to produce 230,000 tons of methanol per day. Assuming the price of methanol at $230 per ton, the gas supply from Simenggaris will be able to generate around $575 million in methanol sales.

Meanwhile, American firm ConocoPhillips signed an agreement to supply natural gas to Chevron Corp. from a field in South Sumatra in a transaction valued at $2.5 billion.

ConocoPhillips will supply 450 billion British thermal units of gas a day to Chevron?s subsidiary, PT Chevron Pacific Indonesia, under a 13-year contract starting 2009. (Godang/Alex)

No	Type of Agreement	Seller	Producer	Buyer	Volume (BBTUD)	Period (year) / Starting
	Electricity
1.	GSA	PT Pertamina EP	TAC Glagah Kambuna	PT PLN (for North Sumatra areas)	28-10	8 / 2009
2.	GSA	Medco E&P Indonesia	Medco E&P Indonesia	Perusda Mura Energi (South Sumatra)	2.5	10 / 2010
3.	MoA	BP Berau	BP Berau	PT Bali Global Energi	-	Aug 2009 ? Jan 2010
	Fertilizer
4.	MoU	BPMIGAS		Pupuk Iskandar Muda	-	Aug 2009 ? Dec 2010
	LPG (Domestic)
5.	SPA	PT Pertamina (Persero)	Total E&P and Inpex	PT Pertamina (Persero)	-	Jul ? Dec 2009
	Industrial
6.	GSA	Medco E&P Indonesia	Medco E&P Indonesia	Perusda South Sumatra	0.2 ? 0.4 (0.5 max)	3 / 2009
7.	GSA	PT Pertamina EP	Pertamina EP West Java area	PT Sumber Daya Kelola (for West Java area)	1.3	5 / 2010
8.	HoA	Pertamina Hulu Energi, Medco E&P, Salamander	JOB Pertamina-Medco E&P Simenggaris	Consortium Pertamina Gas ? Medco Gas	11 / 2012	20
	Oil lifting
9.	HoA	ConocoPhillips	ConocoPhillips	Chevron Pacific Indonesia	380 to 450	13 / 2009