Govt upbeat about China LNG prospects

Govt upbeat about China LNG prospects

The Jakarta Post, Jakarta

The government is upbeat to it will seal a contract worth
billions of dollars to supply five million tons of liquefied
natural gas annually to China's Jiangshu province starting in
2007.

"We hope the sale and purchase agreement can be signed later
this year," Minister of Energy and Mineral Resources Poernomo
Yusgiantoro told reporters on Monday.

Poernomo said Indonesia might take the LNG supply from the
Bontang LNG plant in East Kalimantan.

Rachmat Sudibyo, the head of the upstream oil and gas
authority, BP Migas, confirmed that negotiations were ongoing
between the agency and the potential buyer, Pacific Oil and Gas
Ltd.

One option being discussed is that the buyer could build a new
LNG train in Bontang.

If Indonesia secures the deal, it will the country's second
contract to supply LNG to China. Last year, Indonesia secured a
contract to sell 2.6 million tons of LNG per year to China's
Fujian province from 2007.

The gas is to be taken from the country's third LNG plant in
the Bird's Head area of Papua province. The plant is being
developed by a consortium led by BP Plc. Construction of Tangguh
is expected to start next year.

Indonesia is struggling to maintain its position as one of the
world's largest LNG producers amid rising competition from other
new LNG producers, including Malaysia, Australia and Qatar.

The government, through BP Migas, has been intensifying its
effort to seek new markets as far afield as the U.S.

In July, BP Migas signed initial agreements with U.S. buyers
such as Sempra Energy and Marathon Oil Corp. to supply around 6
million tons of LNG per year to the U.S.