Pertamina flexible in marketing Tangguh LNG

Pertamina flexible in marketing Tangguh LNG

SEOUL (Dow Jones): Indonesia's state-run Pertamina said Monday that it is willing to be flexible in how it markets new liquefied natural gas from Tangguh LNG in Irian Jaya.

"Pertamina recognizes that the market demands... evolution in LNG contracts," said Sjahrial Daud, the senior vice president director of corporate affairs at Pertamina.

In a prepared speech for the 13th International Conference & Exhibition on Liquefied Natural Gas, or LNG13, Daud said Pertamina will listen carefully to the its customers' needs.

"Pertamina is willing and able to meet this challenge, in part due to the cost-competitiveness of the Tangguh gas reserves," Daud said.

According to Daud, new areas for Pertamina to discuss with its buyers include pricing structure, launch customer participation in production sharing contracts, or PSCs, and volume flexibility.

Pertamina is eyeing development of Tangguh as its third multi- train LNG export center, after the Bontang and Arun gas fields, Daud said.

Tangguh, located in the northwest part of Iran Jaya, will benefit from lower shipping costs because it is closer to its major Asian-Pacific customers than Bontang and Arun, Daud said.

Pertamina hopes to sell LNG to Japan, South Korea and Taiwan, Daud said.

The company's president Baihaiki Hakim said Monday that Pertamina is targeting to sell 1.5 million to 3 million metric tons of LNG from Tangguh to China.

The construction of the Tangguh LNG plant, which has proven gas reserves of 18.3 trillion cubic feet, is scheduled to start in 2002 and expected to be completed between 2005 and 2006.

With two trains launched, the Tangguh plant will be producing 3 million metric tons of LNG annually, John O'Reily, BP's spokesman in Jakarta has said.

The construction of the plant is pending environmental consultation, which is slated to be concluded sometime next year, O'Reily said.