LNG Limited delays Central Sulawesi LNG agreement

Australian firm LNG Limited has has delayed the execution of a Heads of Agreement (HOA) with the operator of Senoro-Toili PSC for gas supply to its proposed Padang LNG plant project in Central Sulawesi.

The firm initially planned to execute the agreement during the quarter ended June 30, 2006.

?Execution of the gas supply HOA and subsequent Gas Sale & Purchase Agreement have been deferred pending finalisation of the scope of the project (eg, gas delivery rate) and the gas suppliers? proposed level of investment in the Padang LNG Project,? LNG Limited said in its quarterly report on Monday.

The firm has planned to build the Padang LNG plant with a designed production capacity of 1.7 metric tons per annum to be sold to one of more existing LNG customers in Indonesia. The project is expected to start production in 2008

The company also said it was committed to closing a financial arragement for the project within six months after the execution of the HOA.

Senoro-Toili block is jointly operated by Medco Energi and Pertamina.(denny)