Fujian LNG contract reconfirmed

Fujian LNG contract reconfirmed

The Jakarta Post, Jakarta

China has reconfirmed the awarding of the Fujian liquefied
natural gas (LNG) contract to Indonesia, ending speculation that
it was reconsidering the contract following the recent visit of a
Taiwanese politician to Indonesia.

China's parliamentary speaker Li Peng told Vice President
Hamzah Haz during their meeting on Tuesday that the contract
reflected China's commitment to continuing energy cooperation
with Indonesia.

"Mr. Li Peng explained that the awarding of the Fujian
contract reflected China's goodwill regarding continued
cooperation (with Indonesia) in the energy sector," Coordinating
Minister for Political and Security Affairs Susilo Bambang
Yudhoyono said after accompanying Hamzah during the meeting.

China announced last month that it had selected an Australian
consortium led by Woodside Petroleum Ltd to be the supplier of
LNG to Guangdong province but offered the Fujian LNG contract to
an Indonesian consortium led by BP PLC, which had also bid for
the Guangdong contract.

In the wake of the announcement, Taiwan's Vice President
Annette Lu Hsu-lien visited Indonesia offering a contract to
supply LNG to Taiwan. But many considered it a political maneuver
rather than a serious business offer.

The visit infuriated China and it was feared that the budding
superpower would reconsider its Fujian contract offer.

During the meeting, Bambang said, Hamzah and Li Peng also
discussed ways of tackling rampant smuggling, amid suspicions
that many Chinese goods were being smuggled into the country.

"Illegal trading and smuggling were discussed because they are
detrimental to both sides," Bambang said.

However Yudhoyono said the talks were still at the early
stages.

Many local electronics and textile producers have complained
about the surge in Chinese-made imports, suspecting that many of
the goods, which sell cheaper than locally-made products, have
been smuggled into the country.

The Indonesian timber industry has also complained about the
smuggling of Indonesian logs into China. The logs have allowed
China's timber industry to flourish and even reexport wood
products to Indonesia.