Indonesia sees closer energy ties with China

Government said on Friday it will likely see closer cooperation with China's energy sector, particularly as its liquefied natural gas (LNG) exports enjoy a competitive advantage.

The visiting Chinese foreign minister, here on a one-day visit, told his Indonesian counterpart the vast archipelago played an important role in China's energy development.

"Foreign Minister Tang Jiaxuan said Indonesia has a competitive advantage in the (LNG bidding) process," Hassan Wirajuda told reporters after discussions with Tang.

"China also says there will be more purchases of energy in future as economic growth there continues. They expect Indonesia to play a role in that because Indonesia has big energy resources," Wirajuda said.

"The distance between Indonesia and China is closer (than other countries) and that makes the cost of energy cheaper," he added without giving details of any specific deals.

China's largest offshore oil producer CNOOC Ltd has shortlisted three companies as possible suppliers of LNG for a terminal in southern China, including oil major BP , which could use natural gas from the Tangguh field in remote Papua province.

In January, CNOOC also bought the Indonesian oil and gas assets of Spanish oil giant Repsol-YPF for $585 million.

Another Chinese oil company PetroChina planned to acquire Devon Indonesian assets for $216 million.(*)