Tokyo Gas eyes Tangguh LNG

Tokyo Gas eyes Tangguh LNG

Dow Jones, Bandar Seri Begawan

Tokyo Gas Co. is currently in talks to purchase liquefied
natural gas from Russia's offshore Sakhalin projects and
Indonesia's Tangguh project, a senior company official said
Tuesday.

"It's under negotiations now," Junichi Namiki, senior manager
of Tokyo Gas's gas resources department, said on the sidelines of
the Gasex 2002 conference in Brunei.

However, Namiki said he didn't know when the talks would be
concluded. "It depends on supply security, flexibility and the
price," he said.

A number of LNG projects - including Tangguh and Sakhalin 2 -
will commence in 2005-2006. Gas production from Sakhalin 1 will
likely begin around 2008.

So far, Japanese gas and power industries have been
noncommittal about the Sakhalin projects and the Tangguh project.

Separately, Namiki said Tokyo Gas will complete construction
of its first two LNG vessels in September 2003 and March 2005.

In the face of gas and power industry deregulation in Japan,
Tokyo Gas has said it seeks opportunities to utilize the two LNG
tankers.

The company hopes to venture into the spot LNG market with the
completion of the two tankers, Namiki said.

In March, Tokyo Gas Co. and Tokyo Electric Power Co. announced
a plan to purchase a joint 10.08 percent stake in the Bayu-Undan
natural gas field in the Timor Sea, located between East Timor
and Australia, from Phillips Petroleum Co. of the U.S. Tokyo Gas
will receive a roughly 3 percent, stake.

At present, Tokyo Gas, Japan's largest city gas company
imports 6.5 million metric tons a year of liquefied natural gas
from six different supply sources. Malaysia is the largest
supplier, selling over 3 million tons a year to the company.