BP Migas, Korean LNG buyers sign HOA in Bali

Indonesia?s upstream oil and gas authority BP Migas has signed the head of agreement (HOA) with South Korea?s SK Corp. for the supply of liquefied natural gas (LNG) from Indonesia to the latter, BP Migas' vice chairman Kardaya Warnika told Petromindo.Com.

?We signed the HOA in Bali on Sunday evening in Bali,? Kardaya said on Monday.

BP Migas will sign the similar HOA with another South Korean firm Posco on Aug. 14 in South Korea's capital of Seoul.

The HOAs will pave the way for Indonesia to sign purchase and sales agreements to supply the two firms a total of 1.15 million tons of LNG annually for 20 years from 2005.

BP Migas' LNG marketing division head Djoko Hartono explained that under the HOA signed in Bali, the LNG will be supplied from the Tangguh plant to be developed in Papua by a consortium led by Anglo-American energy firm BP PLC. However, since the plant will come into operation in late 2006 or early 2007, while SK needs the gas starting from 2005, Indonesia will first supply it with LNG from the Bontang plant in East Kalimantan.

In the beginning, SK will receive 500,000 tons of LNG per year, but the volume will gradually be ramped up to 800,000 tons per year, according to Djoko.

Posco is the world?s fourth largest steel maker, while SK is South Korea?s largest oil refiner. (godang)