BP Migas inks initial deal with Sempra Energy
BP Migas inks initial deal with Sempra Energy
The Jakarta Post, Jakarta
The Upstream Oil and Gas Authority, BP Migas, has signed an
initial agreement with U.S. Sempra Energy to supply up to 10
million metric tons of liquefied natural gas per annum, in a bid
to tap the lucrative U.S. market, a senior official said on
Tuesday.
The head of BP Migas, Rachmat Sudibyo, said that under the
plan, Indonesia will supply between 6 million and 10 million tons
of LNG per year to Sempra, starting from 2007.
"The agreement was signed on Aug. 28 in San Diego," he told
reporters on the sidelines of the Asia Pacific Oil and Gas
Conference and Exhibition.
Sempra -- a member of the consortium planning to build a LNG
terminal in Baja (on the border between Mexico and California) --
will sell the gas to Mexico and to the U.S. West Coast, Rachmat
said.
When asked about the source of the natural gas, Rachmat said
supplies will come from Bontang field in East Kalimantan and
Tangguh field in the far-flung province of Papua.
Another possible LNG source for the U.S. market is Donggi
field in Central Sulawesi, which is currently being developed by
state-owned oil and gas firm Pertamina, he added.
The deal with Sempra will open up more opportunities for
Indonesia to enter the U.S. LNG market.
Earlier, Pertamina signed a similar agreement with Marathon
Oil Corp. (MRO), which is also eying the gas market in Mexico.
The gas resources for Marathon will be taken from Matindok and
Senoro-Toili blocks in the Donggi gas field project. Matindok is
fully-operated by Pertamina while the Senoro-Toili block is
jointly operated by Pertamina and Exspan, a subsidiary of local
oil and gas company PT Medco Energi International.
Indonesia is struggling to maintain its position as one of the
largest LNG producers in the world amid the increasingly
competitive LNG market of the Asia Pacific region.
While the number of buyers remains flat, the market is now
crowded with producers, including Malaysia and Australia.
The government and the private sector have been working hard
to seek ways to enter the U.S. market. Natural gas demand in the
U.S. is surging as the it faces a steady decline in supply.
Indonesia will face tough competition as Australia is also
eying the U.S. West Coast market.
"We are now intensifying efforts to sell LNG because Indonesia
has the ability to supply gas from a number of resources,"
Rachmat said.