Less than 18 months after discovering the Oyong gasfield in East Java, Santos has signed a heads of agreement contract with PT Indonesia Power that will see Santos's wholly-subsidiary supply Sampang supply gas to the state utility for the life of the field or up to 10 years. Oyong is estimated to contain 90 billion cubic feet of recoverable gas.

The deal, worth "hundreds of millions" to Santos, will supply PT Indonesia Power's 766MW open and combined cycle gas turbine facility at Grati, 60km south-west of the Oyong Field.

First gas supplies are expected to commence late next year, with a minimum of 60 million cubic feet a day delivered to Grati, with payment in US dollars.

Santos managing director John Ellice-Flint said the deal adds to the solid base it is building in South-East Asia and is in line with the company's overall growth strategy, which includes international diversification of its gas business.