(BN) Gas Negara’s Sales Volume May Drop on Lack of Supply (Update1)

By Bambang Djanuarto
    March 18 (Bloomberg) -- PT Perusahaan Gas Negara’s sales of
natural gas may drop this year because of a supply shortage from
ConocoPhillips’s South Sumatra field, Gas Negara President
Director Hendi Prio Santoso said today.
    ConocoPhillips may only be able to deliver 250 million
cubic feet a day this year from its field on Indonesia’s Sumatra
island to the country’s main island of Java, less than the 390
million cubic feet a day of gas it was contracted for, Santoso
told reporters in Jakarta.
    Gas shortage in Indonesia may reach 300 million cubic feet
a day this year, Santoso said. The shortage may affect Gas
Negara’s “bottom line this year” he said.
    Santo forecast in December that Gas Negara’s sales volume
in 2010 may reach 850 million cubic feet a day from 800 million
cubic feet a day in 2009.
    Indonesia’s gas output grew at 2.7 percent in 2008 while
domestic consumption surged 11.5 percent, according to
statistics by BP Plc.
    Santoso also said today that the company wasn’t “thinking
of increasing gas price,” contrary to what PT OSK Nusadana
Securities forecast today in a report.
    “The announcement and the effectiveness of new gas price
hike are imminent,” Nusadana’s Indonesia equity research team
said in their March 18 analysis, adding an assumption of 10-15
percent gas price hike would boost Gas Negara’s 2010 earnings by
9-14 percent.
    Nusadana recommends a “buy” on Gas Negara. Its shares
rose 1.2 percent to 4,300 rupiah as of 11:13 a.m. Jakarta time,
heading for its highest close since Dec. 15, 2003, when the
stock began trading.


For Related News and Information:
Stories on Indonesian gas: TNI INDO GAS BN 
Most-read Indonesian stories: MNI INDO 1W 
Link to Company News:COP US  CN 
Link to Company News:PGAS IJ  CN 

--With assistance from Achmad Sukarsono in Jakarta. Editor: Greg
Ahlstrand

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