S. Korean firm interested in RI's LNG

S. Korean firm interested in RI's LNG

The Jakarta Post, Jakarta

South Korean electricity company Korea Electric Power Corp.
(Kepco) has voiced interest in purchasing liquefied natural gas
(LNG) from Indonesia, Minister of Energy and Mineral Resources
Purnomo Yusgiantoro said on Thursday.

Purnomo said he would visit South Korea for discussions with
Kepco.

"We have not yet decided which plant will supply the LNG,"
Purnomo was quoted by Antara as saying.

If a deal is reached, Kepco is expected to buy between 1.1
million tons and 1.5 million tons of LNG per year from Indonesia
starting in 2006, the minister said.

Purnomo said Kepco initially wanted to invest in Indonesia's
power sector. The government welcomed this plan, but suggested it
also buy LNG from the country.

A deal, if reached, would be more good news for the country's
LNG industry, which is anxiously looking for buyers match its
abundant capacity.

Indonesia has dominated the region's LNG market for decades,
but recently several new players, including Malaysia, Australia,
Qatar, Russia and Brunei, have entered the picture.

Last year, Indonesia lost out to Australia in a tender to
supply three million tons of LNG annually to China's Guangdong
province beginning in 2005. It was instead awarded a contract to
sell 2.6 million tons a year to China's Fujian province beginning
in 2007.

Indonesia also lost out to Qatar in a tender earlier this
month to supply LNG to Taipower. This led to speculation that
plans to build the country's third LNG plant, called Tangguh, in
Papua might be canceled. The plant is being developed by a
consortium led by Anglo-American energy firm BP PLC.

However, Purnomo said last week that Indonesia had won the
tender for the supply of 1.5 million tons of LNG per year to
South Korean power firm SK and steel producer Posco. The South
Korean firms have yet to confirm Purnomo's statement.

Also last week, Indonesia signed a memorandum of understanding
with Texas-based Marathon Oil Corp. to supply LNG from Indonesia
to Mexico and the United States.