JAKARTA Indonesia's state oil and gas company, Pertamina, has begun deliveries of natural gas to Singapore from the West Natuna Sea through a 656 kilometer (407 mile) submarine pipeline, a senior company official said here Wednesday.

The landmark deal is "the first-ever Indonesia-Singapore gas sale through a pipeline," Pertamina's Director of Production and Sharing Scheme Management Iin Arifin Takhyan told a press conference.

He said the gas started flowing to Singapore's Sembcorp Gas last week.

In Singapore a Sembcorp Gas spokesman said 25 new customers had signed up to buy the gas, with potential sales likely to reach one million dollars a day.

The sale of the gas, produced for Pertamina under a production sharing contract (PSC) by Conoco Indonesia, Premier Oil and Gulf Indonesia, was part of a 22-year contract signed with Sembgas two years ago, Takhyan said.

He said Pertamina, together with the three West Natuna partners, will supply 325 million cubic feet of gas a day after a three-year buildup period.

The gas sale is expected to contribute 7-8 billion dollars in net revenue to the government over the next 22 years, he added.

Under the PSC agreement, Pertamina will receive 65 percent of the revenue, with the remaining 35 percent going to the three contractors.

Takhyan said the 1.5 billion dollar pipeline will have a daily capacity of between 700 million cubic feet and one billion cubic feet of gas.

The pipeline, known as the West Natuna Transport System (WNTS) is a series of interconnecting pipelines for transporting gas to Singapore from 17 separate fields.

In Singapore, Sembcorp utilities also announced that it was looking at investing about 150 million Singapore dollars to construct the city-state's first liquified natural gas (LNG) plant to utilize the Natuna gas.

Sembcorp Gas General Manager Francis Gomez was quoted by AFX-Asia, an AFP financial news subsidiary, as saying the company will be conducting a feasibility study to determine whether there will be enough demand to justify the project, which is tentatively scheduled to begin operation by the second half of 2004.

Indonesia, with two giant LNG plants of its own, is currently the world's largest LNG exporter with 42 percent of the Pacific market.