Tohoku, Tangguh in LNG supply talks

Japanese utility firm Tohoku Electric Power Co. is in talks to buy LNG from BP-operated Tangguh LNG, a BPMIGAS official said on Thursday.

BPMIGAS deputy chairman Eddy Purwanto said that Tohoku is looking for supply of 2 cargoes of LNG annually from Tangguh. Eddy said that Tangguh LNG still had spare capacity to supply 2 LNG cargoes annually. He did not say the length of the supply period Tohoku was asking.

Eddy said that decision whether or not to grant supply contract to Tohoku would depend on government?s stance over gas export. ?It will have to wait for government?s decision whether or not to allow new gas export contract,? he said. Government is currently conducting studies on continuation of gas export. President Susilo Bambang Yudhoyono had earlier indicated that Indonesia would reduce future gas export to fulfill domestic gas demand.

Tangguh LNG, which will commence operations in 2008, had bagged contracts to supply 2.6MTPA to Fujian, 1.1 MTPA to South Korea and 3.7MTPA to USA. Tangguh will have designed production capacity of 7.6 MTPA but can be expanded to 8MTPA, according to industry source. (godang)