Indonesia signs new LNG contract with S. Korea.(Economic News In Brief)

Indonesian Commercial Newsletter, April, 2004

The Oil and Gas Executive Board (BP Migas) said it will sign a new gas sales agreement with SK Posco before the end of this month to supply 1.1 million tons of liquefied natural gas (LNG) to South Korea annually. Head of BP Migas Rachmat Sudibyo said the contract will be for 15 years to be supplied from Tangguh, in Papua, where the country is building a new LNG plant.

He said deregulation in LNG procurement has taken place in Japan, South Korea and Taiwan. In South Korea buyers could deal directly with producers and they no longer are required to import LNG via Korea Gas, which previously had the monopoly in LNG procurement. Indonesia already signed long term contract with China's Fujian province to supply LNG from Tangguh, which is expected to start producing LNG in 2007.