BP Migas to sign LNG sales agreement with Sempra in May

Upstream oil & gas authority BP Migas hopes that it will be able to sign sales and purchase agreement (SPA) for the country’s Liquefied Natural Gas (LNG) with buyer Sempra Energy in May this year, Bisnis Indonesia reported Wednesday.

Eddy Purwanto, the agency’s deputy for finance, said in Jakarta on Monday that the government would focus negotiations of LNG sales with Mitsubishi Corp and Sempra Energy following the decision of other potential buyer Marathon Oil Corp to cancel its plan to buy LNG from Indonesia.

“There is no problem with the cancellation of Marathon’s plan. The negotiation will now be focused on Sempra Energy’s offer,” he said.

Marathon signed a memorandum of understanding with BP Migas last year to purchase LNG from Indonesia for about 5.75 million cubic meter per day. The company will market the LNG in the U.S. west coast including California and Mexico.

For this purpose, Marathon planned to invest US$1.5 billion to build an LNG receiving terminal in California. But the company later announced that it had cancelled the plan to buy LNG from Indonesia because the California administration had taken over the property it planned to purchase for the location of the LNG receiving terminal.

Like Maraton, Sempra also planned to market the LNG in the U.S. west coast and Mexico. (*)