BP supports govt's plan to focus on domestic gas market

Anglo-American oil and gas producer BP Indonesia said Tuesday it supported the government?s intention to focus on domestic LNG market if efforts to win overseas markets for liquefied natural gas were unsuccesful, Kompas daily reported.

BP Indonesia?s vice president Satya W Yudha said the government?s plan went in line with his company?s preparations to build a regasifaction plant offshore West Java. Gas for the plant was planned to come from BP?s Tangguh fields in Papua.

Satya said that BP had conducted studies about the gas project plan, and that the construction of the regasification plant was projected to be completed in 2007. The project would cost around US$380 million, he said.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said earlier this week that Indonesia would rather focus on its domestic market if overseas buyers insisted on buying its gas at low prices.

Purnomo was commenting on the drop in Japan?s LNG imports from Indonesia, and Indonesia?s failure to secure Taiwan?s LNG supply contract.

Reports said that Japan?s Tohoku Electric Power Co had decided to cut its LNG imports from Indonesia, under long-term contract, from three million tons to 830,000 tons annually. The company also shortened the contract period.

Last week, United Resources, which had planned to supply Tangguh LNG to Taiwan?s Tatan power plant, failed to win the LNG supply tender opened by Taiwan?s state-owned Chinese Petroleum Corp. (CPP). CPP would import LNG from Qatar?s Ras Laffan Natural Gas Co.

Last year, Indonesia lost out to Australia in a contest to supply three million tons a year of LNG to China?s first terminal in Guangdong province, starting in 2005. (*)