China not yet ready to receive LNG shipment from Tangguh

The first shipment of liquefied natural gas (LNG) from the Tangguh LNG plant in Papua to the Fujian province of China might be delayed because there isn't yet any confirmation from the Chinese provincial administration whether its LNG receiving terminal can be completed according to the initial schedule, Kontan reported on Saturday.

According to the plan, the first LNG cargo for the Fujian province will be shipped in July.

?If Fujian is not ready to receive the LNG from Tangguh according to the schedule, the shipment might be diverted to other buyers such as South Korea,? Energy and Mineral Resources Minister Purnomo Yusgiantoro told journalists on Friday.

The minister said that he would visit Papua this week to see himself the final preparation for the production of the Tangguh LNG plant in the province. If the preparation runs as expected, the first LNG shipment could soon be carried out, Purnomo said.

Meanwhile, Director General of Oil and Gas Evita Herawati said that if the gas delivery from Tangguh field to the Tangguh LNG plant could be begun on June 28 as planned, the fist LNG shipment could be carried out in July.

Purnomo also explained the government?s success to renegotiate LNG sales contracts from the Tangguh LNG plant with two South Korean companies K-Power and POSCO. ?They agreed to increase the upper level of the crude price to US$38 per barrel under the Japan Crude Cocktail scheme from $24 per barrel,? he said.

The Korean buyers had also sent a comfort letter to the government which expresses their readiness to review the contracts every four years, the minister said, adding that the Korean buyers also agreed to adjust the price according to those agreed with Fujian. (*)