Breaking News: Tangguh wins South Korea LNG contract

South Korean steel maker Posco and SK Corp. finally picked BP-operated Tangguh LNG project to win a 20-year contract to supply LNG to South Korean companies, beating a rival bid by Malaysia?s LNG Tiga, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Friday.

?The result of the bidding was announced this afternoon. This means there will be no longer any reason to postpone the Tangguh project,? Purnomo told reporters in Jogjakarta on Friday.

Indonesia had been scrambling to find buyers to justify the construction of two plants with capacity of 7 million tons per annum in Tangguh in addition to the 2.6 MTPA contract secured last year from the Chinese province of Fujian

Under the deal estimated to worth about US$ 5 billion, Tangguh will supply 1.15 million tons of LNG per annum for 20 years starting 2005. Posco, the world's fourth-largest steelmaker by production, would buy about 550,000 tons annually, while SK Corp. would buy about 600,000 tons a year.

Tangguh is scheduled to commence production in 2007. The requirement for SK-Posco contract in 2005 and 2006 would be supplied from Bontang LNG in East Kalimantan.(bodega/alex)