Pertamina, Gulf Indonesia to Sell Gas to Batam

Gulf Indonesia Resources Ltd. and Pertamina have signed a Memorandum of Understanding with PT Perusahaan Gas Negara, the Indonesian state-owned gas distribution/transmission company, for the sale of natural gas from South Sumatra to PGN for the eventual sale to end-users on Batam Island, northeast of Sumatra. Finalization of definitive agreements currently is targeted for August 2002.

Under the MOU, up to 50 million cubic feet per day of natural gas will be supplied from the Corridor PSC operated by Gulf Indonesia. PGN will market the gas to industrial and commercial customers as well as residential end-users on Batam Island. The gas will be delivered through a PGN pipeline, which will run from South Sumatra to Singapore. Construction of the pipeline is scheduled to begin in June 2002, with mechanical completion slated toward the end of 2003. The MOU is an additional gas sale to the Sumatra to Singapore natural gas sales agreement signed in February 2001.

The MOU continues progress toward establishing additional commercial markets for the abundant natural gas reserves of the Corridor PSC, and further develops the fast-growing ASEAN natural gas grid.

Gulf Indonesia Resources Limited holds a 54-percent interest in the Corridor PSC and is contract operator for Pertamina. Other partners are Talisman Corridor Ltd. (36 percent) and Pertamina (10 percent).