Pertamina to sign gas contract with Singapore Power

JAKARTA (JP): State oil and gas company Pertamina said on Monday it expected to sign a deal in November with Singapore Power for a 20-year supply of natural gas from Central and South Sumatra to Singapore.

Pertamina's exploration and production director Gatot K. Wiroyudo announced that the negotiation on the terms of the contract were expected to be completed this month.

"We hope the government will support our plan to sign the contract in November this year," Gatot said.

The contract, if realized, will be the second gas contract signed by Pertamina and a Singaporean company.

On Jan. 15, 1999, Pertamina together with its production sharing contractors (PSC) -- CONOCO Indonesia Inc., Premier Oil Natuna Sea Limited and Gulf Resources (Kakap) Limited -- signed a 22-year contract to supply Singaporean firm Sembawang Gas (SembGas) natural gas from west of the Natuna islands in the South China Sea from 2001.

Gas from both Sumatra and Natuna will be transported to Singapore through underwater pipelines.

According to Gatot, the Sumatra gas will be taken from the gas fields owned by Gulf Indonesia Resources Grissik, Santa Fe Energy Resources Jabung and Gulf Indonesia Resources South Jambi.

Pertamina and the three PSCs will supply 350 million cubic feet per day (MMCFD) of gas to Singapore Power for 20 years from mid-2003.

Investment for the project is estimated at US$1 billion, comprising $700 million for the development of gas fields and gas plants and $300 million for the construction of underwater pipelines linking Sumatra and Singapore, Gatot said.

The project is expected to generate a total income of $7 billion for the government throughout the contract period, Gatot said.

"That's about the same amount as the government estimated income from the West Natuna gas project," Gatot said.

Gatot also said the construction of the underwater pipeline linking the West Natuna area with Singapore had been running smoothly and quickly and that Pertamina and its PSCs expected to deliver the first gas to Singapore in January 2001, four months ahead of schedule.

Under the contract, Pertamina and its West Natuna contractors will deliver 325 MMCFD of gas for 22 years starting April 2001.

The gas supplies to Singapore will be the first gas to be exported by Pertamina through pipeline.

Indonesia is currently the world's largest liquefied natural gas (LNG) exporter with an annual export of 31 million tons.

Gatot also said Pertamina was negotiating with Malaysia's state oil and gas company Petronas to supply gas from Conoco's Block B field in the West Natuna area to Malaysia.

Pertamina and Conoco planned to deliver 250 MMCFD of gas to Petronas' gas plant at the Duyung field off the eastern coast of Malaysia. The Duyung field is about 40 kilometers from Conoco's Block B field. (jsk)