Santos in Negotiations To Sell South Sumatra Gas

Santos is in negotiations to make its first gas sale in Indonesia by the end of the year. Negotiations already under way on a 20-year sale contract to Malaysia with gas sales estimated to start in 2005. A memorandum of understanding (MOU) has been signed between the Pertamina and Petronas for the supply of gas from onshore fields in South Sumatra to Malaysia. The gasfields involved include the Bentu Production Sharing Contract (PSC), in which Santos has a 61.1% interest. The remaining interest is held by Petroz Bentu LDC which is majority owned by Phillips Petroleum. "This MOU is a further step in the international diversification of Santos' gas business," said John Ellice-Flint, managing director of Santos. A gas sales agreement is expected to be wrapped up by the end of the year. Santos said the GSA would result in the supply of 300 million cubic feet per day of gas to Malaysia over the 20-year duration of the contract. The total gas volume outlined under the MOU is 2.19 trillion cubic feet, with the Bentu PSC allocated a 10 percent share. Santos said its share of gas was approximately 135 billion cubic feet.

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