Tangguh, Donggi set to supply LNG to Mexico

Upstream oil and gas authority BPMIGAS said Thursday it would propose to supply Mexico with liquefied natural gas (LNG) from Donggi, Central Sulawesi and Tangguh, Papua if Indonesia and Mexico close a gas supply deal.

BPMIGAS chairman Rachmat Sudibjo said Indonesia could in 2007 or 2008 supply between three and seven million tons per year of LNG to Baja California Regional Energy Complex in western Mexico. They could come from Donggi and Tangguh fields.

?We will propose to supply LNG from Donggi and Tangguh,? Rachmat told reporters.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Tuesday that talks between state oil and gas firm Pertamina and Marathon Oil, a U.S.-based energy firm planning to operate the Baja project, were progressing substantially.

The minister expects that Pertamina will be able to close a deal to supply LNG to Baja when Mexican President Vicente Fox visits Indonesia in September.

Pertamina and Marathon had signed a memorandum to supply up to six million tons of LNG per year to Baja.

Tangguh LNG project, operated by BP PLC, will come onstream in 2007, in time to meet Indonesia?s LNG sale of 2.5 million metric tons to southern China?s Fujian province, under a 25-year contract. The project is located in the Bird?s Head of Papua province. Tangguh has proven gas reserves of 14.4 trillion cubic feet (TCF).

Meanwhile, Pertamina has discovered a new gas field in Donggi and it estimates the field contains approximately 10 TCF of gas reserves.

Indonesia currently has two LNG plants, located in Lhokseumawe, Aceh, and Bontang, East Kalimantan. (godang)