PGN in talks on LNG supply for new vessel

State-owned gas distributor PT Perusahaan Gas Negara (PGN) Tbk is expecting to seal an agreement with BP Berau Limited on the supply of liquefied natural gas (LNG) from the latter?s Tangguh LNG operation in West Papua, The Jakarta Post reported Thursday.

PGN said it hoped the deal would be finalized before the company started operating its new floating storage and regasification unit (FSRU) in July.

PGN investment planning director Wahid Sutopo said on Wednesday that the company was still discussing the LNG supply to feed its FSRU vessel in Lampung.

?The full operation of the floating storage is expected to commence in the second half. By that time, we must have the LNG," Wahid said.

The company?s FSRU vessel in Lampung is designed to have a storage capacity of 170,000 cubic meters of LNG and a capacity to receive 2 million tons of LNG per year for regasification.

Earlier this month, PGN said that construction of the FSRU vessel was complete and that it had departed from Ulsan, South Korea, where it was built. The vessel is expected to arrive in Lampung in May.

SKK Migas commercialization control deputy Widhyawan Prawiraatmaja said earlier that as many as 5 cargoes of LNG produced at the Tangguh plant had been allocated for the new FSRU vessel. However, a gas selling agreement has yet to be signed. (*)