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Fujian to take first Indonesian LNG on July 1

Jakarta: A liquefied natural gas (LNG) terminal in China's Fujian Province on July 1 will receive the first cargo of the gas produced by the massive BP-led Tangguh project in West Papua, Energy Minister Purnomo Yusgiantoro said on Thursday.

Tangguh has contracts to supply 2.6 million tons of LNG per year to a receiving terminal run by state-owned China National Offshore Oil Corp. (Cnooc), and 3.5 million metric tons a year to US-based Sempra Energy LNG.

"The average LNG price is $3.40, so if we sell to [Cnooc] at $3.80, we've already made a profit," Purnomo said on Thursday.

"[Upstream oil and gas regulator] BPMigas has asked us to prepare the first cargo, but in Indonesia, we can't always be punctual. We planned to send the first cargo in mid-June, but we'll add another two weeks of buffer time."

LNG shipments from the Tangguh project to Cnooc's LNG terminal in Fujian were supposed to start in February, but were again delayed to May because the receiving terminal was not ready.

Tangguh, with proven reserves of 14.4 trillion cubic feet, will start producing the gas in mid-June, Raden Priyono, head of BPMigas, told the energy commission in the House of Representatives on Thursday. "BP and BPMigas have evaluated the prices for LNG buyers under a diversion scheme that Sempra has, in a bid to increase state revenue [flowing from the project]."  [15/05/09]


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