BP?s confidence to win China LNG tender boosted after due diligence completion
Friday, April 19 2002 - 02:51 PM WIB
?I think during their visit they have a very good impression about Tangguh and Indonesia as a whole and I think they are convinced that Indonesia would be able to guarantee continuous supply to China,? Gerald J. Peereboom, president of Tangguh LNG told reporters after accompanying Chine due diligence team.
? They have seen a lot about Indonesian political and economic conditions as well as Indonesia?s LNG condition during their visit and they have asked a lot of questions. I think they get the imoression that Indonesia will be able to guarantee supply security to China. Indonesia will have three LNG centers; Arun, Bontang and Tangguh. That?s a solid guarantee for supply security.?
He said having three LNG centers would enable Indonesia to provide back-up in the instance of supply disruption.
?The team also learned Papuan people and government fully support the project, as 70 percent of government?s revenue from gas sales will go to Papua,? he said.
?I think we have been able to ease China or Guangdong province concern about the security of supply.?
Under Papua special autonomy law, 70 percent of government shares in oil and gas revenue goes to Papua provincial and regencies administrations.
The team had just visited Tanah Merah village where the LNG plant will be constructed and Pereeboom said the team was ?moved? by the warm reception of the villagers.
Peereboom added that the team was also showed keen interests in the growing relationship between China and Indonesia in political and economic frontiers.
The team visited Indonesia after conducting due diligence in Qatar and would directly heading for Australia conduct due diligence. The three contenders are scheduled to submit their final round bid on Sunday and China is widely expected to announce the winner in the next few months.
Peereboom said that beside pricing, several factors such as supply back-up, proximity to Guangdong and shipping advantage would be the the main ingredient for China to decide the tender winner.
"I?m very confident that we have an excellent and highly competitive bid and I have every reason to believe that we will be winning that bid for Tangguh and Indonesia,? Peereboom added.
Meanwhile, Josh Fu, vice president of gas and power of BP China said that the team was very confident about the Tangguh LNG project after seeing Indonesian government commitment towards the project.
He said, BP?s confident to win the bid is also based on the fact that BP had strong commitment to invest in Guangdong and has a very good relationship with Guangdong governments.
Indonesia and BP is trying hard to win the three- million- tons- per- annum China LNG deal by sending high ranking government officials including president Megawati Soekarnoputri to lobby China government, since winning of the contract would ensure development of Tangguh LNG plant to be carried out.
BP Plc., the operator of Tangguh also owns 30 percent of the LNG receiving terminal in at Shenzhen in Guangdong, which is scheduled to be completed by the end of 2005. (godang)