Thailand, Indonesia sign Natuna gas deal
Thailand, Indonesia sign Natuna gas deal
BANGKOK (Reuter): Indonesia and Thailand yesterday signed a memorandum of understanding of natural gas sales to Thailand from Indonesia's Natuna project, a statement from the state-run Petroleum Authority of Thailand (PTT) said.
Thai Industry Minister Korn Dabbaransi said earlier on Wednesday that Bangkok had agreed in principle to buy natural gas from the Natuna Project and to acquire a 11-15 percent stake in the scheme.
The PTT did not give details of the MOU.
It said the MOU was signed by PTT governor Pala Sookawesh and Faisal Abda'oe, president of Indonesian state oil company Pertamina.
The MOU said details of the gas sales agreement would be considered and submitted to both governments for approval. It did not elaborate.
Korn said Thailand would buy the natural gas from the Natuna field from 2005, initially at 500 million cubic feet a day in the first two years and later increasing its take to one billion cubic feet.
"Indonesia said it can guarantee the supplies of three billion cubic feet per day for Thailand over the next 30 years. But we can take only the amount mentioned earlier," he said.
"We plan to produce LNG (liquefied natural gas) from some of the gas and sell it to Japan," Korn said.
He said gas prices will be further negotiated but Thailand made it clear that it will buy at platform prices.
PTT said its PTT Exploration and Production Plc unit was given an option to take at least an 11 percent equity in the upstream activities in the Natuna field.
It said the countries would invite Petronas of Malaysia to help build a 1,612-km pipeline from Natuna to Thailand.
The Natuna find in the South China Sea is one of the largest gasfields in the world, containing an estimated 222 trillion cubic feet (TCF) of gas, of which 46 TCF are thought to be commercially recoverable.
The cost of the development, which Indonesia hopes will replace ageing gasfields in Sumatra, has been estimated at US$40 billion.
Apart from Exxon, Mobil owns 26 percent in the project and Pertamina, Indonesia's national oil and gas company, holds the rest.