Sempra hopes to clinch LNG deal in June

Sempra hopes to clinch LNG deal in June

Fitri Wulandari, The Jakarta Post, Jakarta

U.S.-based Sempra Energy expects to seal a contract in June
this year to buy three million tons of liquefied natural gas
(LNG) from the Tangguh plant following a relatively smooth
negotiating process, a Sempra official said.

"There is a lot of work to do but expect that by probably the
end of the second quarter of this year we should have clinched
the deal," Michael Sliwoski, Sempra's vice president, told The
Jakarta Post and Koran Tempo on the sidelines of an oil and gas
industry meeting in Bogor, West Java, on Friday.

Sliwoski said that although it was a complex contract, it had
taken a relatively short time to agree on the details.

"It's a very detailed contract so it will take a number of
months to work out, but even this is a short time as normally
such contracts take up to three years to finalize," he said.

"We found the negotiations very straightforward and
commercially oriented," he added.

If the deal is completed, the Tangguh LNG plant in Papua
province, which is operated by a consortium led by BP Plc, will
supply three million tons of natural gas per annum for twenty-
years to the United States, the largest energy consumer in the
world.

The Tangguh LNG project is the country's third LNG plant after
Bontang in East Kalimantan and Arun in Aceh. The latter two
facilities have a combined installed capacity of 31.6 million
tons per year.

Asked if Sempra would also talk to other LNG producers in
Indonesia, Sliwoski said the supplies from Tangguh would be
sufficient.

"But we are very open to discussions with other suppliers in
Indonesia for other potential projects we have in the U.S.,"
Sliwoski said.

Sempra Energy currently has two LNG receiving terminal
construction projects. One is on the east coast and the other the
west coast of the U.S.

Sliwoski said the selection of Indonesia to supply the gas had
been based on a combination of quality, security of supply and
price.

"The quality of Indonesia's gas matches the quality that we
need. Security of supply is important. We are buying LNG for 20
years. We feel that Tangguh gives us that security. And finally
there are the price and time factors," Sliwoski said, adding that
no agreement had been reached thus far on the price.