EEC and PLN sign interim agreement

EEC and PLN sign interim agreement

PERTH, Australia (Dow Jones): Energy Equity Corp., an
Australian power company, said Wednesday it has entered an
interim agreement with the Indonesian government over the sale of
electricity from Energy Equity's 47.5 percent-owned Sengkang gas
and power project in South Sulawesi.

The Australian company had been in dispute with state-owned
power company, Perusahaan Listrik Negara, over a U.S. dollar
agreement under which PLN is contracted to buy at least 80
percent of the project's power output.

In the wake of the substantial drop in the value of the
Indonesian rupiah against the U.S. dollar, PLN's payment
requirements rose sharply. In response, PLN only made partial
payments.

"A good understanding has been established with PLN for a
longer term agreement that will provide certainty for EEC
shareholders and continue EEC's commitment to maintaining a long-
term power supply to PLN and the people of the economically
growing province of south Sulawesi," Energy Equity Managing
Director Maurice Brand said in a statement.

Under the interim agreement, PLN has agreed to pay a higher
portion of its monthly invoices for the purchase of electricity,
so that Sengkang's cash flow now covers all its power plant
operating costs, gasfield operating costs and total interest
costs of US$14.7 million, Energy Equity said.

The interim agreement will run until definitive agreements are
signed or April 30, 2000, whichever is earlier, Energy Equity
noted.

The other owners of the Sengkang project are U.S. power
company El Paso Energy Corp. with 47.5 percent and Indonesia's PT
Trihasra Sarana Jaya Purnama with five percent.

Shares in Energy Equity Corp. rose 1.5 Australian cents to
22.5 cents, in a market that fell 0.8 percent to 2897.8 points
Wednesday.