Indonesia seeks 1.5 MTPA LNG supply to Kogas

Upstream oil and gas authority BP Migas said Indonesia had submitted bid to supply 1.5-2 million tons per annum (MTPA) of LNG to Kogas out of some 6 MTPA tendered by the South Korean gas distribution company.

? That?s the maximum capacity we can spare (from) our LNG plants,? said BP Migas deputy chairman in charge of marketing Eddie Poerwanto, adding that the proposed supply would come from Bontang LNG plant in East Kalimantan and Tangguh LNG plant in Papua.

Kogas is opening tender to supply up to 6 MTPA of LNG starting 2008 for 20 years. According to Eddie, Kogas divided the volume in three 1.5 MPTA packages, with possibility to add 0.5 MTPA for each package.

Reports said that Kogas had received bids from 12 LNG firms including from Indonesia, Malaysia, Oman, Qatar, Brunei, Australia, Algeria, Iran and Russia. Kogas will pick two or three preferred bidders this month, while terms of the deal are expected to be finalized this year, with the actual deals to be signed in February next year.

?We?re optimistic to be able to win the tender as Indonesia is offering competitive price and attractive terms and condition,? said Eddie, without going into detail.

Elsewhere, Eddie said that talks with South Korean electricity from Kepco had commenced. Kepco is looking to secure 3 MTPA of LNG supply starting 2008. ?Kepco will probably go without a tender,? said Eddie.

Indonesia is currently the world?s top LNG exporter, with production capacity of 27 MTPA.

According to Bloomberg, Kogas currently pays between US$4.50 and US$5 per million British thermal unit (MMBTU) for LNG from Indonesia. At US$3 per MMBTU, 6 million tons of the fuel over 25 years is worth US$23.4 billion.

Kogas wants to pay about US$3 per MMBTU under new contracts, company chief executive Oh Kang Hyun told Bloomberg in May. (godang)