RI submits final bid for gas supply to China<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Indonesia had placed its final bid for a multi-billion dollar
\ntender to supply China with liquefied natural gas (LNG) from the
\nTangguh LNG project in Papua, in an offer that includes granting
\nBeijing a stake in the project.<\/p>\n
Its developer, Anglo-American oil and gas company BP, is
\nmarketing the LNG on behalf of Indonesian state-owned oil and gas
\ncompany Pertamina and the government.<\/p>\n
BP Indonesia vice president for government and public affairs
\nSatya W Yudha said the company submitted the final bid through BP
\nInternational Marketing last Sunday in Beijing.<\/p>\n
\"There is no saying when they (China) will announce a winner,
\nit's really their call,\" Satya told The Jakarta Post, adding that
\nBP expected an announcement within one or two months.<\/p>\n
Indonesia is running neck and neck with fellow LNG exporters
\nAustralia and Qatar for the supply contract.<\/p>\n
The contract could be worth billions of U.S. dollars covering
\na period of up to 15 or 20 years with an annual supply of up to 3
\nmillion tons of LNG.<\/p>\n
If Indonesia wins the bid it would kick start construction of
\nTangguh's two LNG trains, worth around $1.5 billion.<\/p>\n
Satya said that to boost Indonesia's chances, BP had offered
\nBeijing a stake in the Tangguh project.<\/p>\n
\"Our offer includes a certain amount of shares in the
\nproject... the figure is negotiable,\" he said, declining to name
\nthe figure.<\/p>\n
But he added that price, country risk and flexibility were the
\nthree factors that China would use to select its LNG supplier.<\/p>\n
Of these, he said, price was the most important.<\/p>\n
Against Australia, Indonesia may offer a lower price as its
\nshorter distance to China reduces the delivery cost.<\/p>\n
But Qatar reportedly set its LNG cheap from the onset, with
\ntransportation costs being the only important price factor.<\/p>\n
Indonesia stands to loose in terms of its country risk.<\/p>\n
Government officials conceded that strife-torn Indonesia was
\nno match for the more peaceful and stable Australia or Qatar in
\nthis regard.<\/p>\n
Oil and gas or mining operations in restive provinces like
\nAceh and Papua have been targeted by armed groups in the past.<\/p>\n
Last year, America's ExxonMobil Oil Indonesia Inc. suspended
\nits Arun gas operation in Aceh following attacks by armed groups
\nallegedly from the Free Aceh Movement.<\/p>\n
The attacks against a foreign gas operation and the subsequent
\nsupply cuts badly hurt Indonesia's reputation as a reliable LNG
\nsupplier.<\/p>\n
As in Aceh, Papua is home to a separatism movement, although
\nit is less violent. Tangguh's remoteness poses a natural shield
\nagainst security threats.<\/p>\n
The giant province in the eastern most part of Indonesia has
\nbeen entertaining America's gold mining company PT Freeport
\nIndonesia since the 1960s without any major security problems.<\/p>\n
Last week, a Chinese team surveyed the Tangguh LNG project and
\nvisited Indonesia's main LNG plants in Arun and Bontang in East
\nKalimantan.<\/p>\n
On flexibility, Satya said that Indonesia offered China a back
\nup LNG supply from Arun and Bontang.<\/p>\n
He said chances were high for Indonesia to win the contract,
\nwith BP already having won the tender for the construction of an
\nLNG receiving terminal in Guangdong.<\/p>\n
Adding confidence to Indonesia's bid, the government has
\npreviously dispatched a number of high-powered delegations to
\nBeijing.<\/p>\n
One earlier this month was led by President Megawati
\nSoekarnoputri - a move that Satya said demonstrated the
\ngovernment's strong support of the project.<\/p>\n
\"Government to government relations are very crucial,\" he
\nsaid.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-submits-final-bid-for-gas-supply-to-china-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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