PIM 'secures' Tangguh LNG commitment

State fertilizer company PT Pupuk Iskandar Muda (PIM) in Aceh province is optimistic to secure supply commitment from the Tangguh LNG plant in West Papua province. The company will receive 24 cargos of LNG equivalent to 220 MMSCFD of gas which was originally allocated for Sempra Energy.

PIM's President Director Mashudianto said on Thursday the 24 cargoes were to fulfill the company?s needs for two years starting in 2010. PIM needs 12 cargos of LNG or 110 MMSCFD of gas a year to operate two plants.

According to him, PIM will pay US$3, plus $1 in swap fee per MMBTU.

Further talks between PIM and Tangguh will be held in the fourth week of September. ?Hopefully a gas sales agreement will be signed either in October or November,? he said.

Beyond 2011, PIM would get gas supplies from Block A in Aceh operated by PT Medco Energi International, with which the fertilizer firm has stricken a deal, he said.

Oil and gas upstream regulator BPMIGAS's chief R Priyono confirmed a plan to switch Tangguh gas supply from Sempra to PIM. He said the draft sales agreement would be finalized next week, but he was uncertain when it would be signed.

The newly-built Tangguh has sent three cargoes of LNG, including one cargo to Sempra, one cargo to the LNG terminal in Fujian, China owned by CNOOC and another cargo to the LNG terminal in Gwangyang, South Korea owned by giant steel producer POSCO.

Tangguh has 3.7 MTPA long-term supply contract with Sempra with shipment expected to start this year. Tangguh, however, could divert half of the LNG intended to be shipped to Sempra to other buyers by paying $1 per MMBTU premium to Sempra. (kanti)