Indonesian gas agreement in principle reached

Gulf Indonesia Resources Ltd. and partners will sell additional gas from their Corridor Block production sharing contract in south Sumatra, Indonesia, to fuel a steamflood at PT Caltex Pacific Indonesia's Duri field in central Sumatra.


Gulf Indonesia Resources Ltd. and partners will sell additional gas from their Corridor Block production sharing contract in south Sumatra, Indonesia, to fuel a steamflood at PT Caltex Pacific Indonesia's Duri field in central Sumatra.

The deal calls for 1.1 tcf of gas to be delivered over 20 years and exchanged for Duri crude oil. Gas deliveries are expected to begin at 90 MMcfd during 2002, rising to 180 MMcfd by mid-2003.

The gas will be delivered after the installation of compression facilities on the existing 544-km Grissik-to-Duri pipeline owned and operated by PT Perusahaan Gas Negara, the Indonesian state gas distribution/transmission company.

This contract is in addition to the 300 MMcfd of gas being delivered to the project from the Corridor block, said Gulf Indonesia. It said contract quantities under that initial agreement with Caltex will decline to 245 MMcfd in mid-2003. Total combined gas deliveries under both contracts are expected to be 425 MMcfd by 2003.

"This is a great deal for all parties and further strengthens the role of natural gas as a strategic resource for Indonesia," said Bill Fanagan, president and chief executive of Gulf Indonesia. "Importantly, the deal will allow additional Indonesian crude oil exports in the future, thus providing increased foreign exchange earnings for the country."

Gulf Indonesia, a 72% subsidiary of Gulf Canada Resources Ltd., holds a 54% interest in the Corridor Block PSC and is contract operator for Pertamina, Indonesia's state oil and gas company. Partners are Talisman (Corridor) Ltd., a wholly owned subsidiary of Talisman Energy Inc., with 36%, and Pertamina with 10%.

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