Total, Inpex seal LNG supply extension deal with Western Buyers

Mahakam PSC operator Total E&P Indonesia and its partner Inpex Corp. had signed Heads of Agreement (HoA) on February 13 in Osaka, Japan, for the extension of LNG sales to six Japan LNG buyers known as Western Buyers, upstream oil, gas authority BPMIGAS said on Friday.

Western Buyers consists of Chubu Electric Power Company (EPC), Kansai EPC, Kyushu EPC, Nippon Steel Co, Ltd, Osaka Gas Co. Ltd and Toho Gas Co Ltd.

Under the deal, Mahakam PSC partnership through Bontang LNG plant in East Kalimantan would supply 25 million tonnes of LNG for 10 years starting 2011, BPMIGAS release said.

Bontang will supply 3MTPA of LNG in the first five years, of which 2 MTPA would be shipped by seller (CIF) and 1MTPA by buyers (FOB). For the next five years Bontang will supply 2MTPA, of which 1MTPA would be on CIF term and another 1MTPA on FOB.

BPMIGAS Chairman R. Priyono said that selling price for the contract would be higher than previous contract. He did not give detail.

Priyono also said the contract would also annul obligation for the Indonesian side to cover for cargo shortfall it failed to honor in the previous contract.

Total and Inpex have equal interest of 50 percent in Mahakam PSC.(godang)