Indonesia, China ink Fujian LNG deal

Indonesia signed in Jakarta on Thursday a 25-year contract with China to annually supply 2.6 million metric tons of liquefied natural gas (LNG) to Fujian province, the first gas supply agreement ever reached between the two countries.

Signing the sales and purchase contract were president director of state oil and gas firm Pertamina, Baihaki Hakim, and the president director of China?s state energy firm China National Offshore Oil Corporation (CNOOC), Wei Liucheng. Minister of Energy and Mineral Resources Purnomo Yusgiantoro and Zeng Peiyan, chairman of China?s State Development Planning Council (SDPC), witnessed the signing ceremony.

The cumulative value of the contract is US$8.5 billion.

The LNG will come from the Tangguh LNG project at Berau Bintuni Bay, Papua province, which a consortium led by Anglo-American firm BP PLC is currently trying to develop.

China will start construction of the Fujian terminal in 2004, and the facility is expected to start operation in 2006.

Thursday?s contract signing took place less than one day after the first meeting of Indonesia-China Energy Forum ended. The conference took place in Bali and was attended by more than 150 people including 50 Chinese government officials and energy business leaders.

During the Bali meeting, the two countries signed six memoranda of understanding (MOU) worth hundreds of million of dollars to cooperate in Indonesia?s oil, mining and power sectors.

Indonesia lost out to Australia on a more lucrative, $13 billion, LNG supply contract to China?s Guangdong province in August. (godang)