K Power, BP to sign LNG deal

K Power, BP to sign LNG deal

JAKARTA: South Korean power company K Power is set to sign a
final agreement on Tuesday with BP Plc. (BP) to buy liquefied
natural gas from BP's Tangguh LNG project in Papua province.

The Oil and Gas Regulatory Body (BP Migas) said on Monday that
the company will buy 600,000 metric tons of LNG a year for 20
years. The contract is valued at US$1.5 billion. Under the
contract, BP will start supplying the fuel in 2006.

Last month, South Korean steelmaker Posco signed an agreement
to buy 550,000 metric tons of LNG from the Tangguh project over a
period of 20 years. The contract was valued at $2 billion, and
Posco will start taking deliveries in 2005.

BP Migas said that since the Tangguh plant will not come fully
onstream until 2007, the firm would source the LNG supplies for K
Power and Posco from the Bontang LNG plant in East Kalimantan or
from the spot market.--JP