BP Plc will supply 230 million cubic feet of gas per day (mmscfd) to state utility firm Perusahaan Listrik Negara (PLN) from the Tangguh refinery in West Papua staring next year, a minister said on Wednesday.
“BP agreed that the supply of 230 mmscfd of gas will start to flow in 2013,” Energy and Mineral Resources Minister Jero Wacik said.
He said the MOU on the Liquefied Natural Gas (LNG) gas supply between BP Plc and PLN was scheduled to be signed on Thursday.
“The good thing in this agreement is that BP does not determine a time limit and delivery point for the gas, and therefore BP will deliver the LNG wherever PLN is ready to receive,” Evita Legowo, director general for oil and gas at the Energy and Mineral Resources Ministry, said.
She also said the supply would partly be in natural gas and the rest in LNG.
The LNG, Evita said as an example, could be sent to a floating storage and regasification unit (FSRU) in West Java, Lampung or in Arun in Aceh.
“But starting in 2013, the most likely possibility would be to the West Java FSRU,” she said.
The Tangguh refinery currently has two trains that produce a total of 7.6 million tons per year and BP is planning to raise the capacity by another train that is expected to come into production in 2018, Evita said.
Under the supply contract, up to half of the LNG quota from Sempra Energy, totaling 60 cargo, could be diverted elsewhere, but because of the low gas prices in the United States, Sempra has agreed to divert up to 90 percent of its quota, or 54 cargo.
Suryadi Mardjoeki, the head of PLN’s gas and fuel division, said the gas supply will be used to cover gas needs in Medan and Aceh and that gas will be taken to the receiving terminal in Arun.
However, Suryadi added that the price of the gas has yet to be decided.
“The price of the gas will have to wait for the decree of the Energy and Mineral Resources Minister,” he added.