BP Migas to sign energy contracts next week

The Jakarta Post, Jakarta

The Oil and Gas Implementing Body (BP Migas) is scheduled to sign a number of energy contracts worth billions of dollars next week.

Rachmat Sudibyo, the head of BP Migas said the contracts include a Memorandum of Understanding (MOU) to sell liquefied natural gas (LNG) to China's Shandong province.

"We are set to sign the contracts on June 25 in Surabaya," he said after meeting with House of Representatives Commission VIII for mines and energy on Wednesday.

The other contracts are gas purchase agreements with a number of gas producers, notably Amerada Hess, Kideco and Santos, to meet gas demand for the domestic market. The natural gas will be supplied via state-owned gas distribution firm PGN to industrial customers and power plants in East Java.

The contracts cover the sales of 1.250 trillion British thermal units (TBTU) of natural gas worth US$4.2 billion.

State oil and gas firm PT Pertamina will also sign a working agreement with BP Migas for the former's oil and gas blocks.

Following the introduction of Law No. 22/2001 on oil and gas, Pertamina (like any other oil and gas company) is required to sign a working agreement with BP Migas as a regulator in order to work on the blocks.

Rachmat added that his office is working to finalize a gas purchase agreement between state-owned power firm PT PLN and gas producer ConocoPhillips. Once finalized, PLN will get additional natural gas supply of 400 million cubic feet per day (MMSCFD) from ConocoPhillips field in South Sumatra.

"Hopefully, we can settle it in time so that the contracts can be signed next week," Rachmat said.