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30/09/2006
(Jakarta, 30/09/2006) PT Perusahaan Gas Negara (Persero) Tbk (PGN) is pleased to inform that on Friday, September 29th 2006 at 10 PM (Western Indonesian local time), Santos (Madura Offshore) PTY. LTD. has begun delivery of natural gas from its Maleo gas field to PGN's off-take station in Surabaya, East Java. The gas is available for PGN's customers starting Sunday, October 1st 2006 at 3 AM (Western Indonesian local time). Under the Gas Sales and Purchase Agreement (GSPA) worth US$ 550 million between PGN and Santos that signed on May, 31st 2005, Santos will deliver about 243 BCF for a period of 8 to 12 years.

PGN's President Director, WMP Simandjuntak, explained that 243 BCF of gas from Santos will reduce the use of diesel-based fuel of approximately 6.75 million kiloliter. The improvement of gas security in Eastern part of Java will help the industrial customers fueling their machines with natural gas by switching their energy-based fuel from dual-firing burner, diesel and natural gas, to solely natural gas-based fuel. Based on the GSPA contract, the gas will be extended from 100 mmscfd in the first year to 110 mmscfd in the third year by using East Java Gas Pipeline of Pertamina.

Further, Simanjuntak asserted that additional gas from Santos marks the recovery of gas supply condition in Eastern part of Java. Since 2005, gas crisis in East Java has urged Management of PGN at SBU II to apply quota system to its customers. The quota was intended to assist PGN's industrial customers continuously carried on their operational in the midst of limited gas supply they could obtain from PGN. With the new supply coming in, quota system is now brought to an end and all PGN's industrial customers will be able to get 100 percent of the gas, as the contracted volume, starting October 2006.

Meanwhile, PGN's Corporate Secretary, Widyatmiko Bapang conveyed that new additional gas supply from Santos gives enormous impact to East Java economy. The gas availability will enable industrial machines to operate at best capacity after they formerly experienced gas shortage. Certainly, extending production of industries gives opportunity to an improving employment in East Java. To more extent, the additional gas supply will develop competency of industries to contest the global market, as those export-oriented industries will obtain cheaper and cleaner energy.

It is worth-mentioning that PGN will have prospect to enlarge its distribution market share by providing gas to new customers. At present, there have been 48 new customers signed MoU with PGN and 15 of them are ready to make use of PGN's new supply. At the end, PGN expects that the additional gas will contribute more revenue to PGN by extending total distribution volume of 2006 to 400 mmscfd or rose by 29% from that of 2005.