BP, Sempra to sign HoA on LNG supply this month

BP Plc and Sempra Energy will sign in the middle of this month a head of agreement (HoA) to supply liquefied natural gas (LNG) from Indonesia?s Papua province to the United States? West Coast area, Minister of Energy and Mineral Resources said Tuesday.

Purnomo and his US counterpart, Spencer Abraham, will attend the HoA signing ceremony in the United States. He did not mention the exact date of the ceremony.

Meanwhile, the chairman of upstream oil and gas authority (BPMIGAS), Rachmat Sudibyo, said on a separate occasion on Tuesday that the agreement could involve LNG supply of an estimated 3 million tons a year.

Indonesia is in intense negotiations with Sempra and another US oil firm, Marathon Oil, to sell around 5-6 million tons per annum of Indonesian LNG to Mexico and the USA?s west coast area starting from 2008. Both companies are planning to construct LNG receiving terminals and facilities in Mexico.

Purnomo said earlier that one of the main hurdles in the negotiations was pricing.

LNG to Mexico will be supplied from Bontang LNG in East Kalimantan, Tangguh LNG in Papua, and possibly from Pertamina?s Donggi gas field in Central Sulawesi. BP operates Tangguh LNG. (godang)