RI hopes to strike LNG deals in December

RI hopes to strike LNG deals in December

Indonesia expects to strike a final agreement in December to sell liquefied natural gas to Mexico and the U.S. West Coast, Indonesia's Energy Minister Purnomo Yusgiantoro said here on Thursday.

"If negotiations over the price of the LNG conclude, we can sign the agreement in December," Purnomo told reporters.

Mexico and the U.S. West Coast are nontraditional markets for Indonesia. However, the country has been actively marketing its LNG to nontraditional markets due to rising competition from other producers including Malaysia, Australia and Qatar.

"We hope that we can sell our LNG at above US$4/MMBtu," Purnomo said, adding that the price is slightly higher than the domestic price of $3.50 per million British thermal units.

Purnomo said negotiations are continuing with Sempra Energy and Marathon Oil Corp. Sempra and Marathon are two of four companies wanting to build gas processing plants in Baja California, Mexico. The gas from the plants will be sold on the Mexican market and on the U.S. West Coast.

Purnomo said Indonesia plans to supply between 5 million and 6 million tons a year of LNG to Mexico for around 20 years starting in 2007. -- Dow Jones