Singapore negotiates for second gas contract

Initial supplies of Indonesian gas are expected to arrive in Singapore in January�6 months ahead of schedule�about the time a second gas deal between the two countries is due to be signed, an official from Indonesian state-owned oil company Pertamina has said.


SINGAPORE�Initial supplies of Indonesian gas are expected to arrive in Singapore in January�6 months ahead of schedule�about the time a second gas deal between the two countries is due to be signed.

Sofian Farhan, director of natural gas supply and utilization for Pertamina Exploration and production, confirmed that construction of the subsea gas pipeline from West Natuna field to Singapore was completed earlier than scheduled (OGJ Online, Oct. 16, 2000).

SembCorp Gas of Singapore is buying 325 MMcfd of Natuna gas from Pertamina under a $8 billion, 22-year purchase agreement.

The company is moving the gas to its Jurong Island customers, which include power companies SembCorp Cogen and Tuas Power, as well as petrochemical companies such as ExxonMobil Corp. and Ellba Eastern, a joint venture between a unit of Royal Dutch/Shell Group and BASF AG.

Sofian said negotiations were almost complete for a second deal between Pertamina and Singapore Power. An agreement should be signed in January for construction of a $300-million, 325-km line from Sakernan, Sumatra, that would be completed in 2 years.

Under the proposed terms of the 20-year, $7 billion deal, SP will buy 150 MMcfd of beginning in 2002. The volume of gas would increase to 350 MMcfd by 2008.

The south Sumatra gas fields are operated by Gulf Indonesia Resources Ltd. and Santa Fe Energy Resources Jabung, a unit of Santa Fe Snyder Corp., Houston.

Meanwhile, Indonesia is planning to examine its gas exports to Singapore in an effort to raise foreign exchange and bolster its economic recovery, said Chief Economics Minister Rizal Ramli.

Rizal said the government hopes to raise $500 million initially by issuing bonds that will be backed by the $8 billion, 22-year gas purchase agreement between Indonesia and Singapore. Bond buyers would be guaranteed payment from the revenue earned through the sale of gas to Singapore.

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