Japanese firm in talks to purchase LNG from Tangguh

Japanese firm Mizushima LNG Sales Co Ltd is in talks with state-owned oil and gas firm PT Pertamina and Anglo-American oil giant BP plc to purchase liquefied natural gas (LNG) from the Tangguh project, an industry source said Friday.

The Japanese firm plans to bring the LNG to the Mizushima LNG terminal in the Chugoku region of Japan, the source told Petromindo.Com, but declined to give further details.

The LNG receiving terminal, which is currently under construction, is scheduled to start operation in April 2006. This terminal will have a capacity of 600,000 tons of LNG per year.

Mizushima LNG Sales is a joint venture company of Chugoku Electric Power Co, Nippon Oil Corp, Mitsubishi Corporation, Hiroshima Gas Co., Ltd., and among others.

The Tangguh project, which is located in Papua, has secured contracts to export gas to China, South Korea and the West Coast of North America.

The LNG complex is initially designed to have two trains with a combined capacity of 7.6 million tons per annum and is scheduled to commence production early 2008.

The LNG project reportedly require a capital investment of more than US$5 billion.

According to Asian Development Bank?s website, the Tangguh project has proposed a loan of $350 million to the bank.

BP?s partners in the project are CNOOC Ltd, MI Berau B.V (held by Mitsubishi and INPEX), Nippon Oil Exploration Berau, KG Companies (held by Japan National Oil, Kanematsu and Overseas Petroleum Corp), and LNG Japan Corp (held by Sojitz and Sumitomo). (robert)