LNG shipment from Tangguh to Mexico to begin in early 2007

The shipment of liquefied natural gas (LNG) from the Tangguh LNG plant in Papua to Mexico will begin in early 2007, according to the Mexican ambassador to Indonesia, Ahwil Luthan.

Speaking to Antara news agency on Friday, the ambassador said that Indonesia would receive at least US$24 million in foreign exchange earning under the 20-year LNG export contract with Mexico.

Ahwil said that part of the LNG which would be shipped to the Ensenada port in the Mexican state of Baja California would be supplied to Mexican industries and the other parts would be distributed to several cities along the American West Coast including San Fransisco and California.

He said that the prices of the LNG to be supplied by the Tangguh LNG plant would be floated to LNG prices in the international market. The price will therefore fluctuate according to the price development in the world's LNG market, he added.

Earlier reports said that Sempra Energy of Mexico would buy 3.7 million tons of LNG a year from the Tangguh LNG plant. In addition to Mexico, the Tangguh LNG plant has also secured export contracts with China and South Korea's Korea Power and Posco. (*)