PowerGas, Pertamina deal

JAKARTA (JP): State oil and gas company Pertamina signed on Tuesday in Singapore a memorandum of understanding (MOU) with Singapore's PowerGas, a subsidiary of Singapore Power, which will allow the latter to buy natural gas from the former's contractors.

Pertamina spokesman Ramli Djaafar said in a statement that the natural gas would be supplied by Gulf Indonesia Resources Ltd, a subsidiary of Gulf Canada Resources Ltd and Santa Fe Energy Resources (Jabung), a subsidiary of America's Santa Fe Energy Resources Ltd, from their gas fields in South Sumatra.

Djaafar said the gas would be channeled through 420 kilometers of pipelines to a location near Batam and 35 kms away from Singapore. The pipelines would be built by state gas distributor PT Perusahaan Gas Negara (PGN) and PowerGas.

All related parties are to finalize the commercial aspects of the agreement by October and the signing of the contract is slated for March 31, 1999.

The supply of gas to PowerGas is expected to begin in 2001 with a volume of 300 million cubic feet per day. (jsk)