Govt seeks Zhu's support for LNG supply

The government is set to ask the Chinese Premier Zhu Rongji during his four-day visit here, which kicked off Wednesday, to give priority to the Tangguh liquefied natural gas (LNG) project to supply LNG to China, a minister confirmed.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Wednesday the possibility of Chinese support would be feasible given the fact that British American energy giant BP Plc., the parent company of the Tangguh LNG contractor BP, was previously selected to establish one of the receiving terminals in the Chinese province of Guangdong.

"We will request him (Zhu Rongji) to realistically consider Tangguh," Purnomo told reporters after opening a two-day mining and electricity exhibition and conference.

He added that the government would also propose the Chinese premier to speed up the Guangdong LNG tender.

The tender is planned to be issued sometime later this year.

The Guangdong LNG supply contract offers potential sales totaling 3 million tons of LNG annually, beginning in 2005.

A deal with China would pave the way for the construction of the LNG plant in Tangguh, which Pertamina would jointly develop with BP.

During the first stage, the Tangguh plant would build two LNG trains worth US$1.5 billion. Both trains would have an annual carrying capacity of 6 million tons of LNG.

The Tangguh plant will be supplied with gas from the Muturi, Wiriagar and Berau blocks in Irian Jaya, which contain proven reserves of 14.4 trillion cubic feet of gas.

Separately, Pertamina said in a statement on Wednesday that it had signed a letter of intent (LoI) with a Philippine energy firm, GNPower, to supply the latter with 1.3 million tons of LNG per year from the Tangguh LNG project.

Pertamina didn't specify the date of the signing ceremony and the contract terms, saying the details of the LoI were still classified.

It said the LoI would help strengthen GNPower's position in developing power plants in the Philippine in the future.

According to Pertamina, the LoI indicated a confidence from foreign investors in the Tangguh project's ability to supply LNG for a long period of time.

BP also welcomed the LoI, which is evidence of the government's commitment to develop the Tangguh project, promising to work closely with Pertamina to receive other LoIs.

The government said that the agreement was a breakthrough for the Tangguh project, which is important to help develop the mineral-rich province of Irian Jaya.

GNPower said it respected Pertamina's support to supply the LNG to the company as the supply would help Filipinos enjoy lower power rates. -- JP