Govt sets deadline for PGN to sign LNG deal with BP

State gas distributor PT Perusahaan Gas Negara (PGN) has been given until March by directorate general of oil and gas to sign head of agreement (HoA) on LNG supply to the proposed Belawan LNG terminal in North Sumatra.

PGN?s president director Hendi P Santoso told Petromindo.Com on Wednesday that the directorate has ordered PGN as buyer to sign HoA with British giant oil BP Tangguh, as a seller soon. ?Currently, the negotiation is intensifying,? he said.

He said that the volume of LNG remained as earlier planned.

According to Hendi, at the present, PGN is conducting the engineering, procurement and construction (EPC) tender. There were five bidders, which were interested in the contract, he said without giving further details.

In December 2010, PGN?s VP for gas supply Gamal Imam Santoso told Petromindo.Com. that PGN has sent letter to the director general of oil and gas in which the firm asked the government to finalize allocation of 1.25 MT per year of LNG from Tangguh.

Gamal said that LNG that would be supplied to PGN would the volume that was originally to be supplied to Sempra Energy in North America.

According to source on Dec. 22, BP was asking PGN to pay a similar price paid by South Korean firms SK and Posco, which buy LNG from Tangguh. (bernard)