Detailed negotiations will now commence to conclude a gas sales agreement for a "life of field" contract with plateau gas deliveries at a rate of 90 billion British thermal units ("BBtu") per day commencing in 2010.
Premier and its Partners will be providing gas initially from the Gajah Baru discovery with subsequent gas most likely from subsea developments at Naga and Iguana, all in Premier's operated Natuna Sea Block A offshore Indonesia. Gas will be delivered to Singapore via the existing West Natuna Transport System ("WNTS") pipeline.
Premier expects to complete further agreements to deliver additional gas to Indonesia from the same contract area shortly. The initial quantities are up to a maximum rate of 35 BBtu per day, with an option for a further 20 BBtu per day at a later date, for use in power generation in Batam.
Premier (28.67%) operates Natuna Sea Block A on behalf of its Partners, Kufpec (33.33%), Hess (23%) and Petronas (15%).
Simon Lockett, Premier's Chief Executive, commented:
"We are delighted to announce the signature of this agreement for a second gas sale into Singapore. This agreement, when taken together with the signature of the Heads of Agreement on North Sumatra Block A that was announced by Premier recently, represents a significant milestone not only for this project but also towards delivering Premier's production target of 50,000 boepd in 2010".
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