Indonesia to finalize LNG deal with S. Korea firms end of June

Indonesian upstream oil and gas authority BP Migas said LNG sales and purchase agreement with South Korean firms SK Corp. and Posco would be signed in Bali on June 25.

?The deal is already been completed, provided that there will be no delay, it will be signed with Bali along with other gas deals,? said vice chairman Kardaya Warnika.

SK and Posco will buy 1.1 MTPA of LNG from Indonesia starting next year foe 20 years. The LNG will be sourced from BP-operated Tangguh LNG plant in Papua province0, which will commence production in 2007. Kardaya said Tangguh production commencement in 2007, BP would be obliged to find the source of LNG supply to SK and Posco. ?Bontang LNG will back-up the supply bridge only if it has spare capacity. For the rest, BP must find (the supply) from elsewhere,? Kardaya told Petromindo.Com over the weekend.

Kardaya said along with the signing, BP Migas would also formally appoint state oil and gas company PT. Pertamina as single seller of Bontang?s LNG South Korea, Japan and Taiwan markets. He added that BP Migas will also signed cooperation contract, which is somewhat similar to PSC contracts with Pertamina at the same day in Bali. The contract will shed most of Pertamina?s privileged status and make it similar to those of existing production sharing contractors

Other gas deals, including gas sales agreement from ConcoPhillips-operated Corridor gas block in South Sumatra to state electricity firm PLN and agreement to sell gas to state gas distribution firm PT.PGN, will also be signed. (alex)