Tokyo Gas, PTT cancel plan to buy Tangguh LNG

Upstream oil, gas authority BPMIGAS said on Monday that Japanese gas distribution firm Tokyo Gas has formally withdrawn its intention to buy 500,000 tonnes per annum of Tangguh LNG project that would be diverted from Sempra Energy?s Costa Azul terminal in Mexico.

Deputy Chairman in charge of Marketing Djoko Harsono told reporters that Tokyo Gas quit the deal as it considered the price of the LNG to be too high.

Djoko said the unsold Sempra LNG diversion is now being offered to domestic customers such as Aceh fertilizer maker PT.Pupuk Iskandar Muda (PIM) and East Kalimantan fertilizer maker PT.Pupuk Kalimantan Timur (PKT) and to PLN?s subsidiary PT.Indonesia Power.

Djoko added that Thai oil; gas firm PTT has also quit negotiation to buy some of Tangguh LNG volume.

Tangguh LNG has signed a contract to supply 3.7 million tonnes of LNG starting 2009 to Sempra?s receiving terminal in Costa Azul, Mexico. Under the contract, Sempra would pay the Tangguh LNG based on Southern California (Socal) index price. BP could divert half of the volume of LNG by paying $1 per MMBTU premium to Sempra.

BPMIGAS officials earlier said that South Korean firm KOGAS had agreed to buy 1 MTPA of LNG from Tangguh. (bernard)