Optimizing Gas Utilization by Using Multi-destination Contract Term

Abstract

The unrealized projected demand reflected on Gas Sales Agreement (“GSA”) in point-to-point delivery scheme gave potential risk of unutilized volume when the end user is unable to receive and utilize gas delivered as contracted and might trigger Take-or-Pay or advance payment for PT Perusahaan Gas Negara Tbk as seller. The multi-destination scheme mitigates the risk by providing alternative destinations to which the gas can be delivered. This results in an increase of volume of gas delivery and the advanced payment previously paid due to Take-or-Pay shall be entirely taken.