PGN pushes govt to allocate Tangguh gas for N. Sumatra project

IDX-listed state gas distribution firm PT Perusahaan Gas Negara (Persero) (PGN) urged government on Tuesday to finalize LNG allocation from Tangguh LNG for its proposed floating LNG receiving terminal in Belawan, North Sumatra.

?We urge the government to decide on the allocation by the end of this year,? PGN?s VP for Gas Supply Gamal Imam Santoso told Petromindo.Com.

According to Gamal, PGN has sent letter to the Director General of Oil and Gas to ask government to finalize allocation of 1.25 MT per year of LNG from Tangguh. ?We need LNG supply certainty to keep the project going,? he added.

Director General of Oil and Gas Evita Legowo, however, indicated that PGN may not be able to secure LNG supply allocation by year-end. ?Negotiation is still ongoing between PGN and BP (the operator of Tangguh LNG),? she said.

One source said that negotiation stalled as BP is asking PGN to pay similar price paid by South Korean firms SK and Posco, which buy LNG from Tangguh. BP Indonesia officials were not available for comment.

Gamal said that LNG that would be supplied to PGN would come from diversion of volume that be originally supplied to Sempra Energy in North America.

PGN is planning to build an LNG receiving terminal in Belawan to ease gas supply shortage in the province.

Another PGN official said earlier that the company is also eyeing LNG supply from Petronas and Brunei LNG for the project. (godang)