Pertamina, China?s Jiangshu may agree on terms & condition on LNG sale early in 2003

State oil and gas firm Pertamina may early next year agree with China?s Jiangshu Province on terms and condition for a gas sale deal between them, Koran Tempo daily reported on Monday.

Pertamina?s upstream director Muchsin Bahar said over the weekend that Jiangshu government leaders had requested that the province take part in the development of Train I of PT Badak NGL Co in Bontang, East Kalimantan. The gas train is being developed by the company.

The plan was that liquefied natural gas (LNG) to be shipped to Jiangshu would come from Train I. Gas from Bontang would be supplied to a power plant in Jiangshu which will be managed and operated by Singapore-based Pacific Oil and Gas International Corp, Muchsin said.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro and other Indonesian officials visited Jiangshu recently.

Muchsin said the development of Train I would require big amounts of funds, but he added that the government would carefully study it before making decision on whether or not to fulfill the Jiangshu government?s request.

Muchsin said the price of LNG to be sold to Jiangshu would be kept at the same level set for Japanese buyers, and it would be higher than the price of LNG from Tangguh in Papua province.

In August, a delegation from Jiangshu met with Pertamina leaders in Jakarta and expressed interest to buy natural gas from Bontang.

In September, Pertamina signed a memorandum of understanding (MoU) with Jiangshu government officials about gas sale to the region. According to the MoU, Jiangshu would bring in from Bontang 2.6 million tons of natural gas annually.

Indonesia and China signed a contract in September to ship 2.6 million tons of LNG to Fujian a year under 25-year contract. It was the first gas deal ever signed between the two countries. (*)