PRESS RELEASE: Tangguh sign gas sales and purchase agreement with South Korea?s POSCO

Bali, 1 July 2004 ? BPMIGAS, Government Executive Agency for Upstream Oil and Gas Business Activities the Indonesian Oil & Gas Regulatory Agency announces the partners in the Tangguh Liquefied Natural Gas (LNG) project in Indonesia have signed a sales and purchase agreement with POSCO, the world?s second largest steel marker. The agreement involves the supply of 0.55 million tones of LNG per annum for a period of 20 years.

POSCO is currently building an LNG import terminal at Gwangyang in South Korea that will regasify the LNG to be supplied. POSCO has two gas-fired power plants with a total generating capacity of 845MW at their steel mills in Pohang (345MW) and Gwangyang (500MW).

The sales and purchase agreement completes the process outlined in Heads of Agreement between Posco and the Tangguh partners signed on July 25th, 2003.

This agreement represents the first sale of LNG to the private sector in South Korea and has been achieved with the strong support of Government of Indonesia. It is an important step for the Tangguh project which is making excellent progress towards a Final Investment Decision later this year.

? The Tangguh LNG project is located in the Berau-Bintuni Bay region of Teluk Bintuni Regency, in the Indonesian province of Papua (formerly called Irian Jaya). The project is operated by BP Indonesia, which holds a 37.16% stake in the project, as a PSC contractor to the regulator, BPMIGAS.

? The Tangguh gas fields contain 14.4 tcf of natural gas reserves certified as proved by DeGoyler & MacNaughton. The planned LNG processing plant will be able to produce over seven million tonnes of LNG per annum from two initial processing trains.

? The Tangguh Project is targeting a two-train start-up development. The project has already secured a LNG sales contract for 2.6 million tones per annum for the Fujian LNG project in China and is finalising an agreement with Sempra for the supply of 3.7 million tonnes per annum to their import terminal in Costa Azul, Mexico.

? BP?s partners in the Tangguh Project are MI Berau B.V. (held by Mitsubishi Corporation and INPEX Corporation) ? 16.30%; CNOOC Ltd ? 16.96%; Nippon Oil Exploration Berau ? 12.23%; KG Companies (held by Japan National Oil Corporation, Kanematsu Corporation and Overseas Petroleum Corporation) ? 10.0%; and LNG Japan Corporation (held by Nissho Iwai Corporation and Sumitomo Corporation) ? 7.35% (end of release)

Source: BP MIGAS