Medco Signs Agreement to Sell Gas to Pertamina

Medco Energi Internasional through its subsidiary Medco E&P Malaka has signed a Gas Sales and Purchase Agreement (GSPA) Block A, Aceh and Amendment GSPA South Sumatera Block, the company announced Tuesday.

The total gas volume is over 200 Trillion British Thermal Unit (TBTU), equivalent to the total gas sales value of over $2 billion. 

The GSPA with Pertamina for Block A will be used to supply gas demand in Aceh and North Sumatera provinces, especially for fertilizer and local industry. The final investment decision (FID) is targeted by mid 2015 and the gas supply is slated to commence by 2017 for the contract period of 13 years, with a total gas volume of 198 TBTU and a daily gas supply of 58 BBTU per day. The agreed gas price is $9.45 per Million Metric British Thermal Unit (MMBTU) at the tie-in point of Arun Belawan gas pipeline.

The participating interest in this Block A PSC is MedcoEnergi 41.67% (as the operator), KrisEnergy 41.66%, and Japex 16.67%.   

Medco also signed the GSPA amendment with Perusahaan Daerah Mura Energi to fulfill the gas needs for electricity in Musi Rawas Regency, South Sumatera. Medco E&P will supply gas from South Sumatera Block with a total contract volume of 8,750 Billion British Thermal Unit (BBTU) for 11 years with a daily gas supply of 2.5 BBTU per day.  

MedcoEnergi has successfully increased the gas price from $3.00 per MMBTU to $6.50 per MMBTU.