BP Migas says Kogas LNG contract extension deadline by the end of the year

Indonesian upstream oil and gas authority BP Migas said it was working hard to win Arun III LNG contract extension from South Korean company Kogas by the end of this year to ensure the development of another LNG train in Bontang, East Kalimantan.

?Arun III contract will expire in 2005. If we win contract extension, we must build Train I in Bontang, since Arun NGL would not be able to continue to supply due to natural gas reserve depletion and Bontang other eight trains are running on full capacity until at least 2007,? said BP Migas chairman Rachmat Soedibjo on a sideline of a seminar on

?We must be able to clinch the contract by the end of this year; otherwise, Bontang Train I would not be coming on stream in 2006, since it would take two years to develop the new plant,? he added."It would not be possible for Indonesia to supply LNG to Kogas starting 2006 if the contract extension is sealed after 2003."

Arun III contract calls for 3 million tons per year of LNG supply to Kogas. He said BP Migas team had been lobbying Kogas hard to win the contract and had expressed readiness to offer flexible and favorable terms and condition.

Rachmat said that Bontang?s new train is ready to be developed and EPC contractor had also been appointed. ?When we bag the contract, we could proceed construction immediately,? said Rachmat. The new train will have the capacity of around 3.5 million tons per annum.(alex)