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.