As part of the Sampang PSC, which also includes Cue Energy, the partners have signed a Gas Sales Agreement (GSA) with PT Indonesian Power for a minimum of 40 million cubic feet of gas per day for up to 10 years for the entire reserves of the Oyong field with sales beginning in early 2005.
"The Oyong project is Santos' first operated off-shore gas development in Indonesia. Hence this is a significant milestone in our efforts to build the South East Asian business," said Santos managing director, John Ellice-Flint.
"This is a major step towards final project approval expected before the end of the year."
The Oyong field, located in the Sampang PSC, was discovered in August 2001 and has over 90bcf of proven and probable gas reserves and conservatively estimated reserves of 5 million barrels of recoverable oil.
The field is located in 45m of water, 60km north east of PT Indonesia Power's 766 megawatt open and combined cycle gas turbine facility at Grati, Indonesia. Onshore gas processing facilities will be established adjacent to the Grati power station.
PT Indonesia power is the largest of the wholly owned generating subsidiaries of the State owned national electricity company, PLN. PT Indonesia Power operates 8968 MW of generating capacity supplying the Java-Bali grid and has a 50% market share.
Participants in the Sampang PSC are Santos (Sampang) (operator) 45%, Coastal Indonesia Sampang 40% and Cue (Sampang) 15%.
