Korea Gas ready to buy LNG from Tangguh at US$20 per MMBTU

A South Korean gas company, Korea Gas (Kogas), is ready to buy liquefied natural gas (LNG) from Indonesia`s Tangguh field in Papua at US$20 per MMBTU (million british thermal unit), an Indonesian energy official said.

The price Kogas was prepared to pay would be the highest Indonesian LNG had ever fetched, Eddy Purwanto, deputy for operations to the head of the Upstream Oil and Gas Executive Agency (BP Migas), said here Wednesday.

"Currently, we are negotiating the volume and delivery period," he said.

Kogas would possibly buy up to one million tons per year deliverable from 2010 to 2012.

The price would include cif and was based on the assumed Japan Cocktail Crude (JCC) price of US$120 per barrel.

The deal with Kogas was an option in the diversion of a contract with Sempra involving a maximum volume of 1.8 million tons per year.

Purwanto said the Sempra contract would also be switched to Japan and Thailand.

"We have been negotiating the plan with Tohoku in Japan and PTT in Thailand," he added.

With the diversion of the Tempra contract, the average price of LNG from the Tangguh field would be 8.21 US dollars per MMBTU with the assumed JCC price at US$120 per barrel and the assumed South California (SoCal) gas price at US$10 per MMBTU.

"The value of contracts on LNG from Tangguh will have the potential of increasing to 19.7 billion US dollars," he said.

source: Antara | July 2008

Saudis plan Rp 600b rice estate investment

A consortium of 15 Saudi Arabian investors is ready to take part in the Merauke Integrated Rice Estate (MIRE), injecting at least Rp 600 billion (US$65.04 million) into the region, an official says. Writing by Novia D. Rulistia for The Jakarta Post (07/03/08).

The Agriculture Ministry's secretary-general, Hasanuddin Ibrahim, said Wednesday each investor wanted to open about 5,000 to 10,000 hectares of land in Merauke, Papua.

"To open the land, investors need about Rp 8 million to Rp 10 million per hectare. So an investor needs to invest Rp 40 billion for every 5,000 hectares of land they want to open," he said after the signing of a memorandum of understanding with the State Logistics Agency (Bulog).

Merauke Integrated Rice Estate is a program designed to make the Merauke regency in Papua province an integrated rice production complex for supplying the staple food to eastern areas of the archipelago. The government has provided 1.6 million hectares of land for the program.

The ministry earlier said the investment would also be channeled for the construction of 700 kilometers of roads in the regency, 1,500 kilometers of connecting road to West Papua province, three ports and irrigation systems. The projects are expected to start by the end of this year.

The Central Statistic Agency says total harvest area last year in Papua was 20,788 hectares, up from 19,898 hectares a year earlier. The total harvest area in Indonesia was 12.16 million hectares, most located outside Java.

The ministry said the investors from the world's largest oil producer chose Indonesia for the agribusiness venture due to its decent water provision and supporting climate. In addition, Indonesia has adequate paddy conservation technology, including seedbeds, cultivation and reliable human resources.

Hasanuddin said there were also several local firms interested in joining the MIRE program, including Medco E&P Indonesia and PT Bangun Cipta Kontraktor.

According to the Investment Coordinating Board, Saudi realized investment in Indonesia reached $1.3 million last year from zero in 2006.

In addition to investment in the agriculture sector, investors from Saudi Arabia are also interested in investing in Indonesia's tourism, food-processing and energy sectors.

The government has taken considerable measures to attract investment from Middle Eastern countries, such as the introduction of the country's first law on sharia banking and the president's visit to Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait and Jordan in early 2006

Other Middle Eastern investors who have expressed investment plans in Indonesia this year include Dubai-based real estate giant Emaar Properties, which says it wants to build the tallest skyscraper in Southeast Asia in the country, and Ras Al-Khaimah of the UAE, which is interested in developing the Tanjung Api-Api Port and a connecting railway to Palembang, South Sumatra.

source: BKPM | July 2008

BHP Billiton, Indonesian miner agree massive nickel venture

Indonesian state mining firm Antam and Anglo-Australian giant BHP Billiton agreed Thursday to a massive joint nickel mining venture in eastern Indonesia, Antam said.

The venture would be split 50-50 between BHP and the Indonesian company, Antam said in a statement, adding the agreement still needed to be finalised by BHP's board before coming into effect.

Indonesia's Investment Coordinating Board earlier this year announced the joint venture between the two countries would involve the creation of nickel mines and refineries in the provinces of Maluku and West Papua.

The board estimated the value of the venture at 2.5 billion dollars.

Source: Antara | 19 June 2008