PTT could buy gas from Indonesia's Natuna D Alpha block

Indonesia is negotiating with Thailand's PTT for the purchase of undisclosed volumes of natural gas from the Natuna D Alpha block, according to a senior government official.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 27 -- Indonesia is negotiating with Thailand's PTT PLC for the purchase of undisclosed volumes of natural gas from the Natuna D Alpha block, according to a senior government official.

"We are currently still negotiating the gas price and the possibility of transporting it to Rayong, [Thailand,]" said Indonesia's Energy and Mineral Resources Minister Purnomo Yusigantoro.

Purnomo, speaking before the Indonesian Association of Petroleum Engineers, said PTT had earlier been in talks with Indonesia to buy gas from other blocks, but at that time the company decided to obtain its gas supply from Myanmar instead.

"The gas supply [from Myanmar] now seems to be declining, so the company is looking for gas from other sources," said Purnomo, who did not detail how much gas PTT might buy, saying the volume was still under negotiation, along with pricing.

Meanwhile, state-owned PT Pertamina has still not decided on its new partner for the development of Natuna D Alpha's reserves, but Purnomo said the state firm and the Indonesian government would offer the block's natural gas to potential buyers anyway.

"We are always looking for the market, because we don't want to be too late," said Purnomo, who added that buyers must be found before the block enters production, which may begin in 2017.

Initially, Pertamina and ExxonMobil Corp. had rights over the Natuna D Alpha block, but the government decided in 2005 not to extend the US firm's contract, saying it had failed to submit the results of a feasibility study.

In June 2008, the Indonesian government appointed Pertamina to develop the block, and the state firm shortlisted eight potential partners: ExxonMobil, Royal Dutch Shell PLC, Chevron Corp., Eni SPA, Total SA, StatoilHydro, China National Petroleum Corp., and Petronas.

Contact Eric Watkins at hippalus@yahoo.com.

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