Indonesia sets to win LNG tender in China

The government is confident that liquefied natural gas (LNG) from the Tangguh project in Irian Jaya will eventually make its way into China following the demand from China's Guangdong province to all tender participants to ensure continuing flows of LNG, Koran Tempo reported on Tuesday.

Minister of Energy and Mineral Resources said that Indonesia was the only party that could guarantee a continuing supply of LNG as it has more than one LNG liquefaction centers, including ones in Arun, Aceh, and Bontang, East Kalimantan.

"The Chinese government in the tender of LNG supply wants supply guarantee, and it is only Indonesia that could provide such a guarantee," Purnomo said.

If Indonesia could supply China's LNG needs over a 20-year period, Indonesia would collect US$14 billion.

Indonesia's state oil and gas company Pertamina does not directly participate in the tender. But for the first time ever, the state company has entrusted one of its contractors, BP Indonesia., to take part in an overseas tender, liquefied natural gas (LNG) supply tender in the Guangdong province.

According to the director of oil and gas at the Ministry of Energy and Mineral Resources, Rachmat Sudibjo, the appointment of BP Indonesia. to represent Pertamina in the tender was taken based purely on business considerations.

Rachmat said if Pertamina itself went into the tender, it was very likely that it would lose the battle as Pertamina was less known in China. Moreover, actually Pertamina had never participated in any overseas LNG supply tender.

Meanwhile, BP Indonesia's parent company BP Plc of Britain, is well known in China. It recently won a tender to build an LNG receiving terminal in Guangdong, China.

If BP Indonesia wins the tender, Pertamina would sell its LNG to BP Indonesia, that would eventually sell LNG to companies in China.

BP Indonesia is currently leading a consortium of oil and gas investors in a huge LNG project in Tangguh, Irian Jaya. (*)