ConocoPhillips begins gas supply to Indonesia's PGN

JAKARTA, Oct 19 (Reuters) ConocoPhillips has begun gas supplies to Indonesian state-owned gas firm PT Perusahaan Gas Negara (PGN) from a South Sumatra field after months of delay because of a pipeline problem, a PGN official said on Friday.

The Grissik-Pagardewa pipeline project is part of a 661-km (413-mile) long gas pipeline from South Sumatra to West Java with peak volumes of 480 million cubic feet per day.

''Gas from the ConocoPhillips field will be delivered gradually starting with 20-50 million cubic feet per day,'' Heri Yusup, PGN's corporate secretary, told Reuters by phone.

''It is expected that the South Sumatra pipeline will transport 480 million cubic feet per day to West Java next year.'' In 2004, PGN signed a contract with ConocoPhillips to supply 2.3 trillion cubic feet of natural gas for 17 years from 2007. Yusup said PGN was already supplying 100 million cubic feet per day of gas to industries in West Java from a field in South Sumatra's Pagardewa area owned by state-run Pertamina.

ConocoPhillips officials could not be reached for comment.

Indonesia, the Asia-Pacific's only OPEC member, is tapping alternative sources of energy such as natural gas and coal to meet rising power demand and to cut down on consumption of expensive crude oil as its own reserves dwindle.

REUTERS SBA DB1300