Novus sells gas to PGN

Novus sells gas to PGN

SYDNEY (Dow Jones): Australia's Novus Petroleum Ltd. said Wednesday it has signed an agreement to sell gas from its Wunut field in Indonesia to PT Perusahaan Gas Negara, an Indonesian government utility.

Wunut is part of the Brantas joint venture, which is 50 percent-owned by Novus and 50 percent by Lapindo Brantas Inc., the Indonesian operator.

The first delivery of gas was on Jan. 25 and a price in U.S. dollars has been agreed, Novus said in a statement.

"Whilst the gas price at Wunut is confidential, I can say that it is both defined and paid in U.S. dollars and isn't dependent either upon the vagaries of oil price or the rupiah," Novus Managing Director Bob Williams said in a statement.

PGN has agreed to buy 4 million standard cubic feet of gas a day (mmscfpd) for 10 days in the first month of production under an interim agreement, increasing to a "continuous flow of gas" after the fourth month.

The interim agreement is valid for two years and replaces a previous agreement to buy 25 mmscfpd that was scrapped after economic conditions in Indonesia took a turn for the worse. After two years, the original, longer-term gas sales agreement will take effect, Novus said.