Govt urged to follow up Fujian contract

The Jakarta Post, Jakarta

A legislator urged the government on Thursday to quickly follow up on China's offer for Indonesia to supply liquefied natural gas (LNG) to the Chinese province of Fujian.

Joseph Umarhadi of the PDI Perjuangan faction said the government should set up a task force soon for the supply of LNG to Fujian and send the members of it to talk to the Chinese government.

Otherwise, Joseph said, the Chinese government might think Indonesia was not taking the offer seriously.

"Don't talk about volume right now. Let's think about how we can supply LNG to the country," Yoseph said.

China awarded Indonesia last Thursday with a contract to supply 2.5 million metric tons of LNG per year to Fujian, after Indonesia failed to win a hotly contested deal to supply the commodity to Guangdong province. That deal was won by an Australian consortium, Australian LNG, led by Australian energy giant Woodside Petroleum Ltd., which will supply some 3 million metric tons of LNG per year over a 25-year period.

The LNG for Fujian will come from the Tangguh LNG project in Papua province, Indonesia, operated by Anglo-American energy giant BP Plc. The LNG supply to Fujian is scheduled to commence in 2006.

The potential revenue to be received by BP and the Indonesian government from the sale of LNG to China is unknown, as details of the supply contract are not yet available.

In a news conference held last Friday, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the government had set up a task force to follow up on the Chinese offer and the task force would go to China immediately to get clear information about the offer.

The team comprises officials from the Ministry of Energy and Mineral Resources, the oil and gas upstream authority Balak, state oil and gas firm Pertamina and BP Indonesia.

Suara Pembaruan daily, quoting an unnamed source, reported on Thursday that the team would leave for China on Monday, but Nurwinakun, the ministry's spokesman, told The Jakarta Post that there was no clear timetable for the departure.

The establishment of the task force has apparently not been completed yet as Nurwinakun said he did not know who the leader of the task force was, while BP vice president Satya W. Yudha said the leader was "possibly" Kardaya, the acting director general of oil and gas.