Indonesia aims to secure China LNG contract

Having lost a big Indian contract in a highly competitive LNG market, Indonesia is aiming to secure the next big LNG contract in the Far East with China, which is expected to call a tender for 3 million tonnes/year of LNG next month.


JAKARTA�Having lost a big Indian contract in a highly competitive LNG market, Indonesia is aiming to secure the next big LNG contract in the Far East with China, which is expected to call a tender for 3 million tonnes/year of LNG next month.

Rachmat Sudibyo, Indonesia's director general of oil and natural gas in the mines and energy ministry, said his country would keenly bid for the natural gas supply contract, along with Australia, Malaysia, and Qatar.

Indonesian president Abdurrahman Wahid has already expressed strong confidence in his country becoming a major LNG supplier to China and India.

"The Chinese government told us that they are currently preparing the tender documents, which they will have completed very soon, probably next month," Rachmat said in a report carried by the Jakarta Post Monday.

Having failed to secure one of the first LNG supply contracts in India, Rachmat sounded more confident of winning the Chinese deal.

Sources said Abdurrahman, having established close ties with top Chinese officials since he became president, would likely win the much sought-after LNG contract, which Jakarta badly needs to boost its LNG trade.

Industry observers said Abdurrahman will be making his best effort to secure the multibillion dollar, 20-year deal. Chinese participation in the Indonesian gas field and gas trade development would be welcomed by Jakarta, they said.

At the same time, China wants to provide strong support for the ailing Indonesian economy, they observed. Beijing has yet to commit to direct investment in Indonesia, as it has in many other countries in the region.

International oil companies, including BP Amoco PLC, are working out a $1.5 billion plan to develop nearly 20 tcf of natural gas reserves in Irian Jaya, the least-developed eastern Indonesian region. And now that big oil concerns have made large investments in Indonesia's Tangguh gas field, the country, being the world's largest LNG exporter, would not want to lose the precious deal with China, they added.

Holders of gas field concessions are calling on the government to put all diplomatic and economic pressure on emerging markets so that they can develop their reserves, according to published reports. Indonesia claims to have 72.3 tcf of proven natural gas reserves.

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