BG, ARCO in talks over Indonesia gas

BG, ARCO in talks over Indonesia gas

LONDON (Reuter): U.K. gas producer BG Plc said yesterday it was in talks with U.S. Atlantic Richfield Co on possible cooperation in the development of huge natural gas finds in Indonesia.

ARCO on Tuesday announced a massive onshore and offshore discovery in Indonesia's remote Irian Jaya province, adjacent to BG Plc's Muturi concession where gas was found last year.

"We are talking to them about possible cooperation," said a spokesman for BG Plc's BG Exploration and Production.

ARCO said it would spend up to US$3 billion developing the 13.2 trillion cubic feet of proven and probable reserves at its Wiriagar and Berau blocks -- quantities sufficient for the construction of two liquefied natural gas (LNG) trains.

BG Plc holds a 50 percent stake in the Muturi block where another large gas find was made last October. It said it could link up with ARCO in the construction of transportation and processing facilities.

BG Plc said it was hoping to announce the results of current exploration drilling by the end of this month.

"Clearly more gas is the key to this project and any new finds are welcome," the spokesman said.