BP appointed to handle marketing of Tangguh gas

State owned oil and gas company Pertamina has named Beyond Petroleum (BP) as the sole buyer its natural gas to be produced from the Tangguh gas project in Irian Jaya

Iin Arifin, director for upstream operation at Pertamina, said in Jakarta on Thursday that as a part of the deal, BP would be responsible for the marketing of the liquefied natural gas (LNG) to be produced from the massive gas project.

?If BP wins the tender for China?s LNG, the company would be fully in charge in the export of the LNG to the country,? Iin told reporters.

Although BP would be fully responsible for the sales of the Tangguh gas, the company has agreed to procure LNG supply from either Bontang or Arun LNG plants, if the Tangguh project, due to certain reasons, could not fulfill its export commitment, he added.

BP is developing the so called Tangguh gas project covering three major gas fields including Wiriagar, Berau and Muturi gas blocks under a production sharing contract with Pertamina. The company also plans to develop a LNG plant to process the natural gas from the three gas fields.

Under the new agreement, BP will buy all of Pertamina?s gas production share before being processed them into LNG. In the previous contracts Pertamina, besides acting as the sole buyer of gas, also handled the gas exports

According to Iin, with the change, Pertamina would focus on upstream operation, while the downstream activities such as the development of the LNG plant will be handled by BP.

He said the change would also strengthen BP?s bargaining power in its efforts to win China?s LNG procurement auction. With the change, BP, which is involved in the construction of LNG receiving terminal in China, should have more access to sell LNG to the country, he added.(Godang)