BG Group lauds signing of Fujian LNG supply deal

British integrated gas firm BG Group welcomed Thursday?s signing of an agreement between Indonesia and China to supply LNG 2.6 million tons of liquefied natural gas (LNG) annually to China?s Fujian province under a 25-year contract.

?The agreement is a major milestone in the development of the Tangguh project of which BG is a partner,? the group said in a statement released on Thursday.

The cumulative value of the LNG supply contract is US$8.5 billion.

BG Group is among the seven partners in Tangguh LNG plant planned to be built on the Bintuni Bay in Papua province, from where LNG for Fujian will come. The other six partners are Indonesia?s state oil and gas firm Pertamina, Anglo-American oil giant BP PLC, Mitsubishi/Inpex, Nippon Oil, Kanematsu and LNG Japan.

BG Group and ARCO (now BP) agreed in 1997 to collaborate in the supply of gas to the proposed Tangguh LNG project, using reserves from the BG-operated Muturi Production Sharing Contract (PSC) and the BP-operated Berau and Wiriagar PSCs. BG Group has a 50 percent interest in the Muturi PSC, which, together with Berau and Wiriagar PSCs, will supply gas to the Tangguh LNG facility.

?Tangguh is situated close to some significant LNG markets and, as an attractive low unit cost development, we look forward to announcing further supply contracts in the future,? David McManus, Executive Vice President of BG Group said in a statement.

Pertamina president director Baihaki Hakim and the president director of China?s China National Offshore Oil Corporation (CNOOC), Wei Liucheng, signed the LNG sales and purchase agreement in Jakarta. (robert)