RI, China LNG deal imminent: Minister
The Jakarta Post, Jakarta
Indonesia will sign a contract with China for the supply of liquefied natural gas (LNG) to China's Fujian province at an energy conference in Bali between Sept. 24 and Sept. 27, according to Minister of Energy and Mineral Resources Purnomo Yusgiantoro.
"We expect the agreement can be signed in Bali," Purnomo was quoted by Dow Jones newswire as saying on Friday.
An official at state oil and gas company Pertamina who is familiar with the contract confirmed that the contract would be signed in Bali during the conference.
He said Indonesia would deliver 2.5 million tons of LNG per year to Fujian for 25 years, but thus far no agreement had been reached regarding the price.
The LNG will be supplied from the Tangguh plant in Papua province, which will be developed by a consortium led by state oil and gas company Pertamina and Anglo-American oil firm BP PLC.
China will reportedly start the construction of an LNG receiving terminal in Fujian in 2004 and start operating it in 2006.
The output from the Tangguh project is estimated at three million to four million tons of LNG a year. Indonesia hopes to supply any excess to the Philippines.
Last month, China announced an Australian consortium led by Australian firm Woodside Petroleum Ltd. as the winner of the contract to supply LNG to Guangdong province, and offered to Indonesia what analysts describe as a consolation prize: the Fujian supply contract to Indonesia. The loss in the Guangdong tender disappointed many people in the country.
In the wake of the loss, Taiwan's Vice President Annette Lu Hsu-lien made a secret visit to Indonesia, offering a contract to supply LNG to Taiwan. However, the offer was considered by many to be a political maneuver rather than a serious business offer.
The visit infuriated China and it was feared the country would reconsider its Fujian contract offer.
Both the Guangdong and Fujian contracts are the first LNG contracts to be signed by China, although the country is projected to become the main LNG buyer in the region.
At present, LNG buyers in the region are Japan, South Korea and Taiwan, whose markets are all dominated by Indonesia.