Indonesia, the world's third-largest gas exporter, is set to sign a 15-year gas export contract with Singapore at the end of this month, an official says.
Upstream oil and gas regulator BPMigas deputy chairman Eddy Purwanto said Thursday the two countries are "about to complete the negotiation on the volume and the price of the gas".
"We hope the deal can be inked by the end of this year," he said, adding the parties involved in the deal were still undecided over the amount of the exported gas as BPMigas was still calculating the allocation for domestic demand.
Under the contract, Indonesia will deliver the gas from a field in Gajah Baru, Natuna, operated by British-based PremierOil, to Singapore-based Sembawang Corporation.
The contract will last for 15 years, with Indonesia agreeing to pump the gas directly through a pipeline to Singapore.
Should the contract be signed later this month, Indonesia will start exporting the gas in 2011.
"Under the negotiations, we have also set out several requirements for PremierOil, including an allocation for the domestic market, specifically for a power plant in Batam," Eddy said, adding the plant would need around 40 million cubic feet per day.
Based on a BPMigas report, the block managed by PremierOil is expected to produce as much as 100 million cubic feet per day.
Eddy said the deal would replace the previous export contract between the two countries, which was terminated last year due to the failure of Singapore-based Island Power to meet requirements set out by BPMigas.
Under the previous contract, U.S.-based ConocoPhillips was to supply 110 million standard cubic feet per day of gas from a field in Grissik, South Sumatra, to Island Power over a period of 13 years through a gas pipeline network.
However, due to the company's failure in securing the network, operated by another Singaporean company, Gas Supply Pte. Ltd. -- a unit of Temasek Holdings -- BPMigas terminated the deal.
