Govt to offer Chile LNG order to BP

The government will offer Anglo-American energy giant BP PLC to expand the capacity of its Tangguh liquefied natural gas (LNG) plant in Papua to meet LNG order from Chile.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said he would make the offer during his talk with BP CEO Lord Browne, who is scheduled to arrive here for a visit on Thursday.

An international consortium led by BP is developing two LNG trains at its Tangguh plant with a combined production capacity of between 7 and 8 million tons per year. The capacity has been fully contracted, meaning BP has to build more trains to meet the order from Chile.

During the recent Asia-Pacific Economic Cooperation (APEC) summit in Santiago, the government of Indonesia signed a memorandum of understanding (MOU) with the Chilean government on the supply of LNG to the Latin American country.

Chile is seeking for alternative natural gas supply after gas in a bid to reduce dependency on gas supplies from its neighboring countries.

Chile indicated that it would like to buy between 2 and 4 million tons of LNG per year from Indonesia, according to Purnomo.

According to Purnomo, if BP was not interested in the offer, the government would offer the order to the Bontang LNG plant in East Kalimantan or the owners of gas fields in Donggi (Central Sulawesi) and Masela (Timor Sea). State oil and gas company Pertamina and Indonesian private oil firm Medco Energi International have found huge gas resources in the area but thus far they have yet to make fixed plan for the development of the gas resources.

Purnomo said he would send officials from BP Migas to Chile for further talks on the LNG order, including the price for the commodity to be paid by the Chilean government. (Godang/Alex)