BP looking for other LNG markets aside from China

BP looking for other LNG markets aside from China

JAKARTA (JP): BP Indonesia, a unit of the British-American oil
and gas company BP Plc., said aside from China, it was also
looking for market opportunities in the United States, South
Korea and Japan for its Tangguh liquefied natural gas (LNG) plant
in Irian Jaya.

"Aside from China, we are looking for chances to market our
LNG products in California, South Korea and Japan.

"But, thus far only China has shown clear prospects," company
vice president for government and public affairs Satya W. Yudha
said.

He noted that BP was optimistic to win the future tender for
the contract to supply LNG to the world's largest nation given
the numerous advantages possessed by Indonesia as well as BP over
other competitors.

One of the advantages, he said, was the fact that BP had been
selected to build the LNG receiving terminal in the southern
Chinese province of Guangdong.

"So far, China has given positive signals that it is satisfied
with our work so far in building the terminal at the Guangdong
LNG plant," Satya said following a press conference on BP's world
energy review.

China is planning to hold a tender to buy three million tons
of LNG per year for the Guangdong province. It will be the
country's first LNG import.

Among Indonesia's competitors are Qatar, Malaysia, Brunei,
Australia, Iran and Russia.

He said BP had recently sent officials to China to accompany
Minister of Energy and Mineral Resources Purnomo Yusgiantoro and
top officials from state oil and gas company Pertamina to
demonstrate BP and Indonesia's strong interest in the Chinese LNG
supply contract.

The LNG price BP had offered China was competitive compared
with other contenders during the visit, he said, but he did not
specify.

Should China chose the Tangguh LNG plant in the bidding, BP
was ready to sell to Chinese state oil and gas company China
National Overseas Oil Corporation about 5 percent of its stake in
the gas reserves that will supply the Tangguh LNG plant, Satya
said.

BP owned 50 percent stakes in the Wiriagar, Berau and Muturi
production sharing contract (PSC) blocks, which will provide the
Tangguh project with natural gas.

BP and its partners have found proven gas reserves of 14.4 tcf
in the blocks.

Satya said BP Indonesia had allocated between $3 billion and
$4 billion to complete the Tangguh project, adding that the firm
had spent about $500 million on the Tangguh project up until
2000.

Aside from the Tangguh LNG project, Satya said, BP was also
planning to develop the Terang Sirasun gas fields on Madura
Island in East Java, this year.

The development of the gas fields was important to maintain
BP's gas supplies to buyers in East Java, including gas
distribution company PT Perusahaan Gas Negara (PGN) and state-
owned chemical firm PT Petrokimia Gresik.

Thus far, BP supplies the East Java buyers with natural gas
from its nearby Pagerungan field but gas reserves at the field
have been dwindling.

"If we don't start the construction of the Terang Sirasun
project this year, our customers will have a shortage in LNG
supplies starting 2004," he told the Jakarta Post.

He noted however that the government had yet to issue the
permit for the development of the Terang Sirasun gas project.

Satya said that BP had allocated about US$300 million to
develop the Terang Sirasun field, which contained proven gas
reserves of about 1 trillion cubic feet (tcf). (05)