PRESS RELEASE: Tangguh secures first Letter of Intent

In a major step forward for the Pertamina and BP operated Tangguh LNG Project in eastern Indonesia, Pertamina has signed a Letter of Intent (LOI) for delivery of 1.3-mtpa of LNG to GNPower of the Philippines.

GNPower is a Manila-based private company, one of whose affiliates is the developer and part owner of the Quezon Power Philippines project.

The LOI provides for an exclusive period of Pertamina and GNPower to negotiate the supply of LNG from the Tangguh field, thus enabling GNPower to respond fully to any Independent Power Producer (IPP) opportunities for that company.

The details of the LOI remain confidential at this stage.

Pertamina is very pleased with this, Tangguh?s first LOI, which marks the confidence of an experienced IPP developer in the ability of Tangguh to deliver competitive long-term supplies of LNG.

Pertamina partner in the project, BP Indonesia, also welcome the LOI, BP pledges to continue to work hard with Pertamina to quickly secure LOIs for the other opportunities that both parties are currently pursuing. BP is confident of success, as future customers see the commitment of the Indonesia Government, Pertamina and the Province of Irian Jaya (Papua), along with BP and its partners, to successfully develop Tangguh.

Government of Indonesia views the agreement as an important breakthrough for Tangguh which they consider strategically important for the country. LNG is an important part of Indonesia?s future energy business. The Government of Indonesia is believes that the LOI will further strengthen the good cooperation between Indonesia and the Philippines.

GNPower expressed their appreciation for Pertamina?s support: The Philippines and Indonesia are close not only geographically but also culturally. Pertamina is playing a vital role in bringing competitively priced power to the Filipino people by supporting potential IPP opportunities.

The Tangguh Liquefied Natural Gas (LNG) project is an important development for the Republic of Indonesia and will play a crucial role in maintaining Indonesia?s global leadership position in the LNG industry. Furthermore, as Indonesia?s Arun LNG resources approach maturity, Tangguh will significantly replenish the country?s marketable LNG reserves.

The Tangguh LNG project is operated by Pertamina and BP Indonesia and is located in Berau Bay, Irian Jaya. The plant will be able to produce 7 million tons of LNG per annum from two initial processing trains. The Tangguh gas fields contain 18.3 trillion cubic feet (tcf) of independently certified proved and probable natural gas reserves, with and an additional 5.4 tcf of possible reserves already identified. The magnitude of this investment will help renew confidence in the Indonesian economy and pave the way for additional foreign investment.

Tangguh is on schedule to be on-stream in 2006. (*)