BP, Indonesia ink Sempra LNG supply deal

By OGJ editors
WASHINGTON, DC, Dec. 19 -- BP PLC and Indonesia Thursday signed a nonbinding heads of agreement to supply natural gas to a planned 1 bcfd Sempra Energy LNG Corp. facility in Baja California, Mexico.

Sempra expects to begin serving primarily southern California with the gas in 2007. Under the 20-year agreement, 500 MMcfd of gas will be liquefied and shipped from the BP-operated Tangguh LNG project in Papua, Indoensia, to Sempra's processing facility at Baja.

US Sec. of Energy Spencer Abraham, Indonesian oil minister Purnomo Yusgiantoro, and Mexican energy minister Felipe Calderon witnessed the signing, which took place at a US-sponsored LNG Ministerial conference in Washington, DC.

Abraham said the deal was a key part of securing the US's long-term energy needs. "This will help ensure that homeowners as well as industry have adequate [gas] supplies," he said.

BP officials said the Tangguh project is targeting a two-train start-up although a third train might be added in 2009 or 2010. Tangguh is already slated to supply 2.7 million tonnes/year of LNG for China's LNG project in 2007. It also is the "preferred" supplier for 1.1 million tonnes/year of LNG to South Korea's SK Corp. and Pohang Steel Co.

Sempra officials called the supply arrangement "a truly global piece of work."

Tangguh project interest holders are BP 37.16%, MI Berau BV (held by Mitsubishi Corp. and INPEX Corp.) 16.3%, China National Offshore Oil Corp. 12.5%, Nippon Oil Corp. 12.23%, BG Group 10.73%, KG Cos. (held by Japan National Oil Corp., Kanematsu Corp. and Overseas Petroleum Corp.) 10%, and LNG Japan Corp. 1%.

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