BALI, July 19: Natural-gas supply deals worth $3 billion were signed in Indonesia on Saturday in a boost for the industry, including one by ConocoPhillips to serve Singapore’s Island Power for 15 years beginning in 2006.

The deal involving ConocoPhillips, the number-three US oil firm, was worth around $1.5 billion, executives said.

In other deals, Indonesian state electricity firm PLN agreed to buy gas from offshore blocks in East Java province operated by Amerada Hess Corp for $1.2 billion and the other by Australian-based Santos Ltd for $250 million.

The deals were signed on the island of Bali and come at a time when Indonesia has struggled to maintain its competitive edge in the separate liquefied natural gas (LNG) market, partly because of concerns over pricing and the country’s security.

Andrew Hastings, ConocoPhillips’ vice-president for business development in Indonesia, told reporters that 100 million cubic feet of natural gas per day would be piped to Singapore from the firm’s field in South Sumatra province.

“ConocoPhillips signed this gas sales agreement with Island Power for around 100 million cubic feet per day for 15 years,” Mr Hastings said.

In the biggest of the other deals, state electricity firm PT Perusahaan Listrik Negara will buy around 100 million cubic feet of gas per day from Amerada Hess for 21 years, starting in 2005, a statement from the government’s oil watchdog BP Migas said. That would come from the Pangkah block off East Java.

PLN also agreed to buy 40 million to 60 million cubic feet of natural gas per day from Santos for 10 years from the Sampang block in East Java starting in 2005.

“These contracts will hopefully help avoid a power crisis in the future on Java and reduce fuel oil consumption,” Rachmat Sudibyo, head BP Migas, said in a speech at the signing.

Indonesian officials have warned of a power crisis next year on Java and Bali if no additional generating capacity was built. A number of power plant projects are already under way.

The gas needs of densely populated Java are alone estimated to reach more than one billion cubic feet per day in the coming years. Indonesia’s annual power demand is estimated to be growing by around 10 percent annually, one of the fastest rates in Southeast Asia.

Besides ConocoPhillips, Indonesia supplies 325 million cubic feet per day of natural gas to Singapore’s Sembawang Gas under a 22-year deal that became operational in 2001.

Indonesia also expects to soon begin supplying 150 million cubic feet of natural gas per day to Singapore’s Gas Supply Private Ltd. That 20-year deal was signed in 2001.—Reuters