Tangguh LNG to sign gas supply deal with Sempra Monday

Indonesia will sign a final agreement Monday with Sempra Energy LNG Corp. for a 20-year supply of liquefied natural gas to markets in the U.S. and Mexico, Mines and Energy Minister Purnomo Yusgiantoro said Friday.

"The agreement will be signed in San Diego (California)," Purnomo told reporters on the sidelines of the 5th International Conference of the Joint Oil Data Initiative.

Sempra Energy LNG is a unit of Sempra Energy (SRE) of the U.S.

Under a preliminary agreement signed earlier this year, 3.7 million tons of LNG a year was to be delivered from the Tangguh fields in Indonesia beginning in 2007 to Sempra's proposed LNG import and re-gasification terminal near Ensenada in Baja California, Mexico.

But the consortium developing the Tangguh LNG project in the middle of a remote jungle in West Papua, led by BP PLC (BP), said in August that the first delivery of LNG will be delayed to 2008. It blamed the delay on problems ranging from government approval of Tangguh's marketing plans to the completion of construction at the site.

The contract with Sempra will bring the total amount of LNG volume secured by the Tangguh project to over 7 million tons a year, enough to justify the development of two processing plants initially, Purnomo said.

Indonesia has secured deals to supply 2.6 million tons a year of LNG to China's Fujian Province, and around one million tons to South Korea. (*)