Govt approves Tangguh gas allocated to Belawan FSRU

The government has approved portion of gas from Tangguh LNG project, Papua, operated by BP Plc, to be allocated for the Floating Storage and Regasification Unit (FSRU) in Belawan, North Sumatera, Director General for Oil and Gas at the energy ministry, Evita H. Legowo said.

Evita said the focus now is on the negotiation of the price. She expects that the negotiation on gas sales and purchase agreement between the Tangguh operator and the gas buyer to be completed by the end of the year.

?I agree gas from Tangguh will be allocated to Belawan FSRU. I will encourage BP to negotiate on the gas price with the buyer as soon as possible. It should be completed by the end of December,? Evita told Petromindo.com.

She said BP Tangguh, a unit of BP Plc which operates the Tangguh LNG project, has yet to reach an agreement on the gas purchase price with the buyer, state gas distribution firm PT Perusahaan Gas Negara Tbk (PGN). She is optimistic however that her office will be able to facilitate and speed up the negotiation in order for the two parties to reach a deal.

Director for Investment and Risk Management of PGN, Wahid Sutopo said the company is preparing the gas sales agreement with the gas producer and Heads of Agreement (HOA) with the ultimate consumer state electricity company PT PLN.

The Belawan FSRU will be Indonesia?s second facility of its kind. The first one is the FSRU unit at the Jakarta bay, which is scheduled to commence operation in March next year.

On Thursday, H?egh LNG Holdings Ltd of Norway entered into binding Heads of Agreement (HoA) with state gas distributor PT Perusahaan Gas Negara Tbk (PGN) for the provision of the Belawan FSRU. The FSRU newbuilding is due for delivery at end of 2013. (roffie/godang)