BP and Sempra agree on increased cargo diversion

By Bernard Loebs

BP Plc, the operator of Tangguh LNG project in west Papua, and its US buyer Sempra Energy have reached a new agreement that will allow the former to divert 90 percent of LNG cargoes normally allocated to be shipped to the latter?s receiving terminal in North America to other buyers which offer higher prices, a top official with upstream oil and gas authority BPMIGAS told Petromindo.Com.

Chairman R. Priyono said on Thursday that for 2012, Sempra has agreed for diversion of 54 cargoes out of 60 cargoes intended to be shipped this year to Sempra?s Costa Azul LNG receiving terminal in Mexico. Under the original contract, Tangguh LNG was allowed to divert up to 50 percent of the annual volume by paying fee of US$1/mmbtu to Sempra.

Priyono said BPMIGAS and BP Plc. will find buyers who are willing to pay for higher price, including domestic buyers, for the diverted cargoes. ?We are looking for minimum price of $11/mmbtu,? he said.

Tangguh LNG has long-term contract to sell 3.7 million tonnes per annum of LNG to Sempra.

Editing by Alexander Ginting