TotalFinaElf plans to invest US $500 million for LNG plant expansion

French energy giant TotalFinaElf SA will spend $500 million with partners including Pertamina and Unocal Indonesia Co. to expand its liquefied natural gas output in Indonesia by about 14 percent, Bloomberg news agency reported Wednesday.

TotalFinaElf said the plan will add 3 million tons to annual capacity of the Bontang plant in East Kalimantan province by 2004. Bontang, the largest LNG plant in the world, is now capable of producing 22.3 million tons of LNG a year.

``This new production train will give us the ability to sell LNG to new markets like China at very competitive rates,'' said Jean-Marie Beuque, president and general manager of TotalFinaElf Indonesie.

China will call for bids later this year for annual supply of about 3 million tons of LNG to its terminal in the southern province of Guangdong, near Hong Kong. China said it will likely draw LNG from two suppliers. Indonesia, Australia, Qatar and Malaysia have all said they want to win the contract.

TotalFinaElf operates giant gas fields in East Kalimantan which supplies supply natural gas to Bontang LNG,

In Indonesia, BP Plc's Tangguh LNG project in Irian Jaya, which is yet to be built, will compete with TotalFinaElf's Bontang LNG plant to secure contracts to supply China.

``If China just wants to buy 1.5 million tons (of LNG) from Indonesia, then we would recommend Bontang,'' said Ariffi Nawawi, Pertamina's senior vice-president.

Indonesia's other LNG plant, Arun, in Aceh province, has been shut amid attacks by separatist rebels that forced Exxon Mobil Corp. to close gas fields in the area that supply Arun. (*)