Premier targets power plants

Premier targets power plants

SINGAPORE (Dow Jones): Oil and gas exploration company Premier Oil PLC of the U.K. is targeting East Java power producers to offtake its proven and probable natural gas reserves estimated at 450 billion cubic feet in East Java's Pangkah block, Simon Lockett, Premier's commercial manager in Jakarta, told Dow Jones Tuesday.

"We are in the process of negotiating the sale of gas to existing power producers currently using high-speed diesel and fuel oil for their feedstocks," Lockett said.

The proposed gas feed will substitute state-subsidized fuels, Lockett said.

Premier announced Monday the successful completion of an appraisal drilling program on Ujung Pangkah field.

The appraisal confirmed reserves for the field of approximately 450 billion cubic feet of high-energy content natural gas, known rich gas, with the possibility of developing additional oil from the structure, Premier said in a statement.

Premier Oil holds a 40 percent majority stake in the Pangkah production sharing contract. Amerada Hess (Indonesia-Pangkah) Ltd., a unit of Amerada Hess Corp. has a 36 percent share in the venture, while the remaining 24 percent is split equally between Gulf Resources Ltd. and Dana Petroleum PLC.