Indonesia approves gas and 11 % of Natuna to Thai

May 12, 1997 Indonesia's Pertamina has said that President Suharto has approved a plan to give the Petroleum Authority of Thailand (PTT) an 11 % stake in the Natuna gas field in return for gas sales. "We are ready to give Thailand's PTT an 11 % stake in Natuna gas project. The important thing is we will link the share divestment with the marketing," Pertamina president director Faisal Abda'oe told. He said Suharto had approved the plan and a memorandum of understanding was signed with officials from the state-owned PTT in Bangkok on May 8. However, the two sides had still to agree various issues, including the price of the gas and on a pipeline to transport the gas from the Natuna field in the South China Sea to Thailand.
Thai officials have said the countries could invite Petronas of Malaysia to help build a 1,612-km (1,008-mile) pipeline from Natuna to Thailand. Abda'oe said PTT affiliate PTT Exploration and Production Plc was given an option to take at least an 11 % stake in the upstream activities in the Natuna field. He said under the MoU, PTT will purchase gas from the Natuna field as early as 2003. Volumes will reach a minimum of 500 mm cfpd from 2005, later increasing to 1 bncf in 2007. "The sales and purchase agreement should be concluded not later than the end of November 1997 or such later date as may be mutually agreed by the parties," he said.
Pertamina currently has a 24 % stake in the Natuna gas project with Mobil holding 26 % and Exxon 50 %.
Abda'oe said Pertamina was also hoping Japanese companies would take a stake in the project but said a sales agreement would be a prior requirement, as with PTT. "A Japanese consortium has expressed interest in taking a stake in Natuna, but we will have to see who will be the first in buying the gas," he said.