BP seeks LNG shippers for Tangguh

BP Plc, Europe's largest oil company, said it's seeking bids from Indonesian shipowners to supply five liquefied natural gas ships, valued at about $850 million, to carry the fuel from its proposed Tangguh plant in West Papua, Bloomberg reported.

PT Humpuss Intermoda Transportasi, a shipowner controlled by Hutomo Mandala Putra ``Tommy'' Suharto, the imprisoned son of former Indonesian President Suharto, and PT Samudera Indonesia, the nation's largest container line, are among the companies that may bid to supply the ships, officials from the companies said.

BP's $5 billion Tangguh project, which will start in 2008, may boost orders at shipbuilders such as Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. Shipyards have received orders for 39 LNG carriers this year, double last year's total, as companies including London-based Golar LNG buy new vessels to meet surging demand for the fuel.

BP is seeking ships to carry gas from Tangguh to customers including South Korea's SK Corp. and Posco. BP also expects to sign an agreement this month to supply the fuel to Sempra Energy, which is building an import terminal in Mexico.

``There's a tender exercise for LNG carriers that's been kicked off by BP and its partners,'' Jamie Jardine, a spokesman for BP Shipping in London, said in a telephone interview. Jardine couldn't give details on the terms of the tender.

BP, which owns 37.2 percent of Tangguh and operates the project, may buy an additional six LNG carriers itself to handle some exports from the Indonesian plant and a project being developed in Algeria. The earliest that shipbuilders can deliver new vessels, which each cost about $175 million, is 2008.

BP and it partners signed an agreement on Tuesday to sell 600,000 tons of LNG a year to SK Corp. starting in 2006. Posco, South Korea's biggest steelmaker, will buy 550,000 tons of LNG a year for 20 years starting in mid-2005. In 2002, Tangguh won a contract to supply 2.6 million tons a year of the fuel to a plant in China's Fujian province.

BP plans to sell 3.7 million tons a year of LNG to Sempra.

``Five ships of 160,000 cubic meters will be supplied through open tender,'' Eddy Pramono, chief executive of Humpuss Intermoda, said in an interview in Jakarta. ``We are very keen in pursuing this.'' Humpuss owns one LNG carrier and manages three more with its partner Japan's Mitsui O.S.K. Lines Ltd.

Indonesian companies may ask international partners to take stakes in the shipping project, said Pramono, who will travel to Japan this week to discuss the bid with Mitsui O.S.K.

Samudera is also bidding to supply the vessels, Chairman Soedarpo Sastrosatomo said in an interview.

There were ``lots'' of expressions of interest in the tender, Lukman Mahfoedz, senior vice president of Tangguh LNG, said in an interview in Jakarta, without naming any companies.

The successful bidder will lease the tankers to BP and its partners for 20 years, Humpuss's Pramono said.

Daewoo Shipbuilding and Samsung Heavy Industries in June won orders to build eight LNG ships for Qatar, which has said it may need 57 LNG tankers in the next eight years. Qatar, holder of the world's third-largest gas reserves, plans to boost its LNG export capacity to 64 million tons a year by 2010, state-owned Qatar Petroleum said in March.(*)