The agreement was concluded between PGN and ConocoPhillips’ wholly owned subsidiary, ConocoPhillips (Grissik) Ltd, for the supply of 2.3tcf of gas over 17 years, commencing in the first quarter of 2007, at a rate of 170 million cuft/d. The gas will come from the ConocoPhillips-operated Corridor Block PSC located in South Sumatra. Gas deliveries will plateau at 400 million cuft/d 2012 until the contract termination in 2023.
This natural gas sale to PGN will underpin the further expansion of gas production and gas processing facilities at the Suban gasfield in the Corridor PSC operated by ConocoPhillips. This development, known as Suban Phase 2, will be connected to the Corridor PSC’s existing gas processing facilities at Grissik in south Sumatra. PGN will construct a new pipeline from Grissik, through South Sumatra to Cilegon in West Java. A further pipeline also will be built to connect Grissik to Muara Tawar east of Jakarta. Construction of the 606-km Grissik-Muara Tawar pipeline is scheduled to take 30 months, and the establishment of a dual pipeline system to customers in Jakarta and West Java will promote the expanding domestic gas market in Java. .
The gas sales agreement has been approved by BPMIGAS, the regulatory organization representing the Indonesian State’s oil and gas interests, and it has appointed ConocoPhillips (Grissik) Ltd to sell the State’s portion of gas to be sold from the Corridor Block PSC under the agreement.