Pertamina extends LNG sale talks with Marathon

President Director of state-owned oil and gas company Pertamina Baihaki Hakim said on Wednesday a memorandum of understanding (MOU) between the company and U.S.-based Marathon Oil Company had been extended for another six month.

Under the MOU, which was signed in January 2003 and supposed to expire in May, Marathon will buy Pertamina?s LNG from the Donggi block.

Baihaki said that Pertamina was still negotiating the LNG selling price with Marathon.

He said that Pertamina expected the selling price to be at least equal with the Fujian LNG deal. Pertamina last year sealed a contract to sell LNG from the Tangguh gas field to China?s Fujian province.

?The negotiation with Marathon is still ongoing and the most essential matter is about the LNG selling price,? he told Petromindo.Com.

Marathon is a U.S.-based energy trading company. A consortium led by the company in January 2003 won an engineering, procurement, and construction contract for Baja California Regional Energy Complex in western Mexico.

The complex is expected to have a capacity to regasify as much as 750 million cubic feet per day of LNG to meet local needs and for export to southern California. Part of the LNG is expected to come from the Donggi block.

Marathon expected to complete the construction of the LNG complex in 2006.

Pertamina estimates that the Donggi block, in Central Sulawesi, contains approximately 10 TCF of reserves.(alex)