Singapore Power, Pertamina say gas deal going forward
Singapore Power, Pertamina say gas deal going forward
SINGAPORE (Dow Jones): Singapore Power and Indonesia state- owned oil and natural gas company Pertamina officials confirmed Tuesday that negotiations for a multibillion dollar natural gas deal are progressing, easing concerns that the project had stalled.
Responding to reports Monday that it was negotiating to buy natural gas from Singapore's SembCorp. Gas, Singapore Power denied those discussions would have an impact on the Indonesia project and said it expects to finalize a deal with Indonesia "very soon."
"Yes, SP is negotiating with SembGas for the purchase of 75 million cubic feet a day for natural gas," Singapore Power spokeswoman Alice Ong said. "This doesn't affect SP's ongoing negotiations with Pertamina for the long-term supply of natural gas from Asamera. We expect to conclude the Asamera deal very soon."
Singapore Power and Pertamina signed a memorandum of understanding in September 1998 for the delivery of 150 million cubic feet of natural gas per day from the Asamera fields in southern Sumatra to Singapore's power stations beginning in 2001. The volume was slated to increase eventually to 325 million cubic feet a day.
About five weeks ago, Pertamina Senior Vice President and Director Priyambodo Mulyosudirjo said the deal had stalled because Singapore Power wanted to buy a smaller volume of gas than originally discussed. Singapore Power denied the report.
Priyambodo said Tuesday that the head of Pertamina's negotiations with Singapore Power reported to him Monday that talks were going well because Singapore Power was going back to saying it would buy the original volume of natural gas discussed.
Singapore Power declined Tuesday to discuss any details of the deal.
However, Priyambodo said talks had definitely deadlocked a few weeks ago because of a disagreement about purchase volumes and prices. He said he thought Singapore Power had "stepped up its efforts intensely" to get a deal signed because of the media reports about an impasse last month.
The companies had expected to finalize an agreement by March of this year, but failed to do so after controversy arose over tenders for the building of a 135-kilometer underwater pipeline linking the Sumatran natural gas field to Singapore, costing an estimated $354 million.
Although Priyambodo said he didn't know when the natural gas deal with Singapore Power would be signed, he said the recent progress in the talks was "a good sign. We all want this project to proceed."
He said an agreement would have to be reached soon because Indonesia state gas distribution company PT Perusahaan Gas Negara has a deadline for securing loans to begin work on the pipeline. He said he didn't know what that deadline was specifically, but said it is "soon."
PGN is reportedly ready to build the pipeline, but has delayed the project awaiting an agreement between Singapore and Pertamina.