Joint venture buys 40% stake in PGN's subsidiary

Joint venture buys 40% stake in PGN's subsidiary

Agencies, Singapore/Kuala Lumpur

Joint-venture company, Transasia Pipeline Co., has completed a
deal to buy a 40 percent stake in Transgasindo, a unit of
Indonesian gas transmission company, PT Perusahan Gas Negara, or
PGN, ConocoPhillips said Tuesday.

ConocoPhillips is part of the consortium comprising Malaysia's
Petronas, Singapore Petroleum Co., Talisman Energy Inc. that
makes up Transasia.

Transasia entered an agreement with PGN in September to buy 40
percent of Transgasindo shares.

The stake will cost $187.6 million, which includes a
commitment to contribute $57.6 million in new equity to assist in
financing a South Sumatra-Singapore gas pipeline, ConocoPhillips
said in a statement.

Transasia is a consortium set up in Mauritius involving
Petronas Int. Corp. with 35 percent interest, CONOCO Indonesia
Holdings 35 percent, SPC Indo-Pipeline Co. 15 percent and
Talisman Transgasindo Ltd. 15 percent.

Currently under construction by PGN, the Grissik-Batam-
Singapore pipeline will be transferred to unit company,
Transgasindo on completion in late 2003 at a fixed price.

The 468 kilometer onshore and offshore Singapore pipeline
will, when completed, transport natural gas from Sumatra to
Singapore at an initial maximum rate of 350 million standard
cubic feet a day of gas.

Transgasindo assets include the existing Grissik-Duri
pipeline, which runs from the Corridor Block gas plant operated
by a unit of ConocoPhillips to the Duri oil field in Riau.
Caltex, a unit of ChevronTexaco Corp., uses gas to facilitate its
Duri oil production.

Transgasindo's new boards of commissioners and directors will
each include two representatives from Transasia - to be nominated
by ConocoPhillips and Petronas for an initial four years,
ConocoPhillips' statement noted.

"We are looking forward to expanding Transgasindo's pipeline
system to meet the demands of the domestic and international
markets, and integrating it into the Trans ASEAN Gas Pipeline
network," said Paul Warwick, president of ConocoPhillips'
Indonesian unit.

Separately Petronas said the deal marked its entry into the
gas transportation business in Indonesia and signified an
important move by the company to diversify and expand its
business portfolio in Indonesia.

Petronas' other activities in Indonesia include upstream
business and oil trading.

Petronas said the pipelines would provide additional linkages
towards an integrated cross-border gas infrastructure in
Southeast Asia, and was a step forward towards realizing the $7-
billion Trans-ASEAN Gas Pipeline (TAGP) network.

It said Malaysia currently has the most developed and
extensive gas infrastructure in the region and was well-
positioned to become the backbone of the TAGP network.

The 4,000-kilometer (2,500 mile) TAGP project is aimed at
ensuring a secure supply of natural gas among ASEAN members and
providing competitive incentives to their producers.

ASEAN in July said it would set up a gas consultative council
to study the regulatory and institutional frameworks for cross-
border supply, transportation and distribution of natural gas in
the region.