BP, Sempra sign deal to bring Indonesian LNG to N.America

Anglo-American giant oil, gas firm BP Plc., together with Indonesian upstream authority BP Migas had signed signed a Heads of Agreement (HoA) with Sempra Energy LNG Corp. for a 20-year supply of liquid natural gas (LNG) from Indonesia to markets in the US and Mexico, BP announced Thursday.

Under the agreement, 3.7 million tons of LNG per annum will be delivered from the BP-operated Tangguh fields in Indonesia over a period of 15 years beginning in 2007 to Sempra's proposed LNG import and re-gasification terminal near Ensenada in Baja California, Mexico.

The agreement also provides for an additional five years of LNG supply to Sempra's terminal from other Indonesian LNG sources.

The terminal, when completed, will have the capacity to process up to 1 billion cubic feet per day of natural gas. Sempra will market the gas to customers in the US west coast and Mexico.

“The agreement will be highly flexible in nature allowing for LNG cargoes to be diverted to other core markets in Asia while providing core volumes and revenues to the terminal,” said BP in a statement.

The Tangguh LNG project is located in the Berau-Bintuni Bay region of Teluk Bintuni Regency, in the province of Papua. The Project is targeting a two-train start-up development and had already secured an LNG sales contract for 2. 7 million tons per annum for the Fujian LNG project in China commencing in 2007 and is the preferred supplier for the supply of 1.1 million tons per annum to SK and Posco of S. Korea.

BP has 37.16 percent stake in Tangguh project. Other participants are: MI Berau B.V (held by Mitsubishi Corporation and INPEX Corporation) (16.30 percent); CNOOC Ltd. (12.50 percent); Nippon Oil Exploration Berau (12.23 percent); BG Group (10.73 percent); KG Companies (held by Japan National Oil Corporation, Kanematsu Corporation and Overseas Petroleum Corporation (10.0 percent); and LNG Japan Corporation (held by Nissho Iwai Corporation and Sumitomo Corporation)(1.07 percent).(alex)