Pertamina hopes to find buyers for Tangguh LNG

Indonesia's state-owned oil and gas company Pertamina said Monday that it is expecting to sign contracts with foreign buyers by the end of the year for sales of liquefied natural gas to be produced from the Tangguh LNG refinery, SuratkabarCom reported on Tuesday.

"We are doing our best to market the gas," said Maskurun, the head of Pertamina's processing division. We hope to sign contracts (with buyers) by the end of the year."

He said Pertamina is offering the LNG to Indonesia's traditional markets such as China, India, Japan and South Korea.

The signing of the LNG contracts will pave the way for the development of the Tangguh LNG project, which is expected to be completed in 2005 in cooperation with Atlantic Richfield Indonesia Inc., a unit of BP Amoco Group.

Maskurun told The Jakarta Post that Baihaki Hakim, the president of Pertamina, will soon visit China to lobby the Chinese government to buy LNG from the Tangguh LNG plant.

The project will be located in West Papua, formerly known as Irian Jaya, and will consist of both downstream and upstream components.

The upstream project will include subsea pipeline transport to onshore liquefaction facilities, a marine terminal for tanker export of LNG, and support facilities. Development of the project is scheduled to start in 2004.

The downstream projects will include construction of an LNG plant, storage tanks, and support facilities. Conceptual engineering of the downstream project was completed in 1996, and initial construction is expected to start in mid or late 2001.

The refinery will produce between 6 million and 7 million tons of LNG a year from two processing plants in the early stage of operation. More processing plants will be built later according to demand.

The gas feed will be supplied by the Wiriagar field, which has 14.4 trillion cubic feet of proven reserves.(*)