Under the terms of the 20-year gas sales agreement signed February 12, 2001, sales from the Corridor Block and two other Blocks in Sumatra are expected to peak at 367 mmcf/d in 2009, of which gas sales to Singapore from Corridor will be about 155 mmcf/d (Talisman's share approximately 56 mmcf/d). This is the third major gas sale from the Corridor Block. Talisman holds a 36% interest in the Corridor Block with ConocoPhillips (54%) and Pertamina (10%).
Production from the Corridor gas plant started in 1998, with Talisman's share averaging approximately 98 mmcf/d in 2003. At year end 2002, Talisman had booked over 1 tcf of proved natural gas reserves and expects to transfer more reserves to the proved category with finalization of additional gas sales contracts. These include an agreement to sell gas from Corridor to Island Power in Singapore commencing in 2006. The contract is for up to 15 years and Talisman's share of volumes is expected to be 117 bcf. In addition, negotiations are underway and Heads of Agreement have been entered into for major gas sales from Corridor to markets on the island of West Java.
Talisman Transgasindo Ltd., another wholly-owned subsidiary of Talisman Energy Inc., indirectly owns a 6% interest in the pipeline from the Grissik plant on the Corridor Block to the Duri steam flood project. It also has a right to acquire a 6% interest in the 474-kilometer pipeline from Grissik to Singapore.
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