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Sale of Tangguh Gas to Japanese Buyer Leaves Upstream Regulator Fuming
Reva Sasistiya | December 02, 2009

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Indonesia’s upstream oil and gas regulator BPMigas is questioning the validity of the sale of 1.9 million metric tons of liquefied natural gas from the British Petroleum-led Tangguh project in West Papua to a Japanese buyer.

On Wednesday morning, Karen Agustiawan, PT Pertamina’s president director, signed a gas sales agreement with Tohoku Electric Power to supply 125,000 tons of LNG per year over 15 years starting in 2010. State-owned Pertamina is BP’s junior partner in the Tangguh plant.

Speaking on the sidelines of a House of Representatives Commission VII overseeing energy issues later on Wednesday, BPMigas head Raden Priyono said the regulator had not been informed about the signing ceremony.

“The green light on any agreement should come from BP Migas,” he said.

Budi Indianto, BPMigas’ deputy chief, said the agreement was not valid without approval from BPMigas. “We did not acknowledge the validity of the agreement,” he said. “We see the signing as only an initial agreement.” BPMigas had yet to approve the sale as the Energy Minister Darwin Zahedy Saleh has not given the go-ahead yet, he added.

Basuki Trikora, Pertamina’s vice president of communications, said he was not aware of BPMigas’s disapproval. The state oil and gas firm had acted as the lead seller of the gas, but was not aware that the deal needed approval from the regulator, he said.

A BP spokesperson declined to comment on the issue.

BP and its partners in the Tangguh plant have already agreed to supply South Korea’s K-Power and Posco each with 1.15 million tons of gas a year over 20 years, US firm Sempra Energy with 3.6 million tons annually over 20 years and China National Offshore Oil Corp. with 2.6 million tons a year for 25 years.

The Tangguh plant, which cost $5 billion to build, is located in West Papua’s Bintuni Bay, which holds 14.4 trillion cubic feet of proven gas reserves.




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