Tangguh inks third LNG deal<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
British energy giant BP PLC signed on Wednesday a US$2 billion
\ndeal to supply liquefied natural gas (LNG) from its Tangguh LNG
\nproject in Papua province to South Korea's power company K Power.<\/p>\n
BP will supply 600,000 metric tons of the fuel a year for 20
\nyears starting from 2006 to K Power with an option for the South
\nKorean firm to ask for an additional supply of up to 200,000
\nmetric tons per year.<\/p>\n
K Power will use the fuel to fire a 1,074 megawatts power
\nplant which is under construction in Gwangyang, South Korea.<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
\nsaid the deal was significant for Indonesia in maintaining its
\nlead in the LNG market.<\/p>\n
\"The contract will add more strength to Indonesia as a leading
\nLNG supplier,\" Purnomo said in a speech after witnessing the
\nsigning of the deal by BP Indonesia's president Bill Schrader and
\nK Power's president Young Duk Park.<\/p>\n
Indonesia has been struggling to maintain its position as a
\ntop LNG producers in the increasingly competitive market. Last
\nyear, Indonesia exported 26.5 million tons of LNG. The bulk of
\nLNG exports went to Japan (68 percent), followed by South Korea
\n(19 percent) and Taiwan (13 percent).<\/p>\n
The contract with K Power was the third for the Tangguh
\nproject. BP signed an LNG deal in 2002 to supply 2.6 million
\nmetric tons to China's Fujian province for 20 years starting
\n2007.<\/p>\n
Last month, it inked a deal to supply 550,000 metric tons of
\nthe fuel to South Korea's steelmaker POSCO starting 2005.<\/p>\n
With the three LNG deals, Tangguh project has a total sales
\ncommitment of 3.75 million tons.<\/p>\n
Eddy Purwanto, deputy head of finance and marketing of the Oil
\nand Gas Regulatory Body (BP Migas) said BP is expected, within
\nthe next few months, to sign an LNG agreement with U.S.-based
\nenergy firm Sempra Energy to supply 3.7 million tons a year of
\nthe fuel to the western coast of the U.S.<\/p>\n
Signing the LNG deal with Sempra will mean that the Tangguh
\nproject has enough sales commitments to start construction.<\/p>\n
Lukman Mahfoedz, senior vice president of BP Tangguh said the
\nproduction of Indonesia's third LNG plant has been rescheduled to
\n2008 from the initial 2007. The nation has already two LNG
\nplants, located in Arun, Aceh and Bontang, East Kalimantan,
\nrespectively.<\/p>\n
He said BP planned to seek the fuel from Bontang LNG plant or
\nfrom other plants to meet contracts which will become effective
\nbefore Tangguh begins production.<\/p>\n
\"We are talking with several (LNG) suppliers\" Lukman told
\nreporters. He didn't give details on the plant.<\/p>\n
The project is now seeking financing from a consortium of
\nforeign banks to finance the construction.<\/p>\n
Lukman said the project will cost $5 billion, of which BP and
\npartners will cover $2 billion with the remaining $3 billion
\nexpected to come from lenders.<\/p>\n
Located in Berau-Bintuni region in Papua province, the Tangguh
\nLNG plant is expected to produce 7 million tons per annum in the
\nfirst phase of production. Gas fields, which will feed the plant,
\nhave certified reserves of 14.4 trillion cubic feet (TCF).<\/p>\n
BP holds a 37.16 percent stake in the project in partnership
\nwith MI Berau BV (16.30 percent), CNOOC Ltd (16.96 percent),
\nNippon Oil Exploration Berau (12.23 percent), KG Companies (10.0
\npercent) and LNG Japan Corporation (7.35 percent).<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/tangguh-inks-third-lng-deal-1447893297",
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"sponsor": "Okusi Associates",
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