BPMIGAS, Marathon Oil sign MOU of LNG supply

Indonesian upstream oil and gas authority BPMIGAS signed on Thursday a memorandum of understanding (MOU) with US oil company Marathon Oil Corporation to sell Indonesian liquefied natural gas (LNG) to Mexico and the U.S. west coast market, BPMIGAS official said.

?The MOU calls for an annual supply of 6.0 million tons of LNG from Indonesia to Mexico and the US starting in 2007,? said Eddy Purwanto, Finance and Marketing of BPMIGAS.

Eddy said the LNG supply would be sourced from Bontang, Tangguh and Donggi LNG plants. Bontang plant is in operation, while Tangguh, located in Papua province, is scheduled to commence production in 2007. Meanwhile, efforts are being made to find new buyers for LNG from Donggi, Central Sulawesi.

Eddy expected BPMIGAS and Marathon to sign LNG sales and purchasing agreement early next year.

He further said BPMIGAS was also in talks to sign similar MOU with another U.S. company, Sempra Energy. ?The MOU with Sempra is expected to be signed in one month,? he said.

A Marathon-led consortium and Sempra Energy are planning to build LNG receiving terminal in Baja (Mexico) with U.S. west coast as potential market.

Indonesia, the world?s largest LNG exporter, is scrambling to find new buyers for its LNG.

Also on Thursday, Marathon signed extension of an MOU with state oil and gas company Pertamina to jointly develop and market Donggi LNG. (alex/godang)