LNG delivery to RP starts in 2006

LNG delivery to RP starts in 2006

Dow Jones, Singapore

The state-owned oil and gas firm Pertamina expects to make its
first delivery of liquefied natural gas from the Tangguh field to
the Philippines in late 2005 or early 2006, a BP Plc. official
said Monday.

BP holds a 50 percent stake in the Tangguh gas field project
and production is slated to begin in late 2005 or early 2006.

Satya W. Yudha, BP Indonesia's vice president for government
and public affairs, said Monday that Pertamina and Philippine
company GN Power signed a letter of intent in early November.
Under the terms, the Philippine company will import 1.3 million
metric tons a year of LNG from the Tangguh field.

Yudha said the LNG sales contract with GN Power will be for a
period of 15 to 20 years. He declined to comment on the pricing
terms saying they were confidential.

GN Power will use the gas for power generation, he added.

"(GN Power) is our first Tangguh gas buyer," Yudha said. "Once
production comes onstream, we'll be exporting LNG to the
Philippines."

Tangguh, located in the northwest part of Irian Jaya, holds
18.3 trillion cubic feet of proven gas reserves.

With two LNG processing trains launched, the Tangguh plant
will be producing 3 million tons of LNG annually starting late
2005 or early 2006.

By then, Yudha said the Philippines is likely to have
constructed a LNG receiving terminal, where the Tangguh gas will
be delivered.

The Philippine government has said it is likely to decide
early next year whether or not to build a receiving terminal in
Bataan.

Construction of the LNG terminal will be part of the
Philippine government's efforts to reduce its dependence on
imported crude oil and raise natural gas consumption following
the start of production from its domestic Malampaya gas field in
September.

State-owned Philippine National Oil Co. earlier last month
said it may also seek to import LNG from Pertamina to fuel an
ethylene cracker and power plants.

BP and Pertamina are also hoping to sell Tangguh LNG to China.
BP and Pertamina are competing with LNG suppliers in Qatar,
Russia and Australia to supply China with 3 million tons of LNG a
year for delivery beginning 2005.