Purnomo confirms contract to supply LNG to China's Fujian province

Minister of Energy and Mineral Resources Purnomo Yusgiantoro on Thursday confirmed reports that China had awarded Indonesia the contract to supply 2.5 million tons of liquefied natural gas (LNG) annually to the province of Fujian.

The gas supply contract had been awarded to Indonesia without prior tender, Purnomo told reporters.

Under the 20-year contract, Indonesia would start delivering 2.5 million tons of LNG to Fujian in 2006 or early 2007, Purnomo said.

Purnomo said Chinese Prime Minister Zhu Rongzie had advised President Megawati Soekarnoputri about the gas supply contract.

The minister said Rongzie?s notification to Megawati about Indonesia?s contract to supply LNG to Fujian was contained in the same letter which said China had selected Australia to annually supply 3 million tons of LNG to Guangdong province in southern China, starting 2005. Australia, Indonesia and Qatar had been shortlisted in a tender for a 20-year contract to supply LNG to Guangdong. Indonesia?s LNG for the province had been planned to come from BP Indonesia?s Tangguh field in Papua.

Purnomo said Indonesia should not feel discouraged by its failure to win the contract to supply gas to Guangdong because Fujian and nearby provinces could become a profitable enough market for Indonesia?s gas.

?We should say thanks to the Chinese government. It was a good decision, and the Indonesian government accepted it,? Purnomo said. (godang)