Tender Procurements and Contract Opportunities Indonesia

JAKARTA: BP Tangguh and PT Pertamina (Persero) LNG sales contracts signed as many as 125,000 tons per year by consumers Tohoku Electric Power Co., Japan with a pricing formula which follows the movement of oil prices.
Vice President Communications Pertamina Trikora son Basuki said Pertamina appointed by the parties as the lead seller in the transaction. Contract period, he said, will apply starting in 2010 with over 15 years duration.

"To note here only Pertamina appointed as the lead seller. So, not Pertamina bought later exported," he said yesterday.

According to him, the appointment of Pertamina has been agreed by the parties consists of the Tangguh project upstream contractors, Executive Agency for Upstream Oil and Gas, and the government.

"The appointment was made by the parties, in which also include government and BP Migas."

Basuki did not explain how the value of the contract of sale of liquefied natural gas (liquefied natural gas / LNG) is. It's just that, a source who knows the business transaction reveals the Tangguh LNG price formula this time better than the previous formula.

This was caused by the LNG price will follow the movement of Japanese crude oil prices. "The price premium and still better than the Arun LNG pricing formula."

According to business records, with crude oil price level of U.S. $ 70 per barrel price of the Arun LNG in the range of U.S. $ 5.3 per million British thermal units (Btu). The price rose to U.S. $ 7.6 per million Btu if the price of crude oil in the range of U.S. $ 100 per barrel.

Approval letter

However, Deputy Operations Control Indianto BP Migas said Budi instansinya can not admit the signing of gas sales during the still do not get letters of approval from the Minister of Energy and Mineral Resources.

He said the agreement made yesterday is still a preliminary agreement and not binding on the parties.

"So the Tangguh gas sales is still possible to be supplied to domestic consumers. Thus, we consider the signing of this initial and still waiting for approval from the Ministry Energy and Mineral Resources," he said.

Previously, Budi inform fifth Tough cargo shipping 140,000 cubic meters of which is for Posco Power, South Korea last month. Budi explains the five LNG cargo delivery is from Tangguh train-2, which until now producing as much as 13,000 cubic meters per day.

Meanwhile, the Mahakam block operator Total E & P Indonesie is committed to improving the supply of gas to domestic consumers to about a third of its production began in 2012.

President Director and General Manager Tiotal E & P Indonesie Elisabeth Proust revealed the current supply to fertilizer plants Bontang has reached 300 MMSCFD and on its own initiative the company will renew the supply of gas to the fertilizer factory when the contract ends.

In addition, he said, Total is working together with Inpex has signed a Memorandum of Understanding (MoU) with the consortium of PT Perusahaan Gas Negara Tbk (PGN), PT Perusahaan Listrik Negara (PLN) and PT Pertamina to supply liquefied natural gas (LNG) for 11 , 75 million tons of supplies to the period between 11 and 13 rahun into a floating LNG terminal planned consortium.

"Gas supply 1.5 million tons will begin shipping in 2012. We are committed to continue supplying gas to the domestic. In 2012 the supply to domestic production will reach one third of the Mahakam block," he said.