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Indonesia signs

LNG deal with

South Korea

JAKARTA: Indonesia's state oil company Pertamina said it had signed a liquefied natural gas (LNG) contract with South Korea worth $3.34 billion to supply one million tonnes of LNG per year.

"We have signed an additional 20-year contract with South Korea covering one million tonnes of LNG a year," Pertamina's spokesman Didi Sunarwinadi told Reuters by telephone from Denpasar on the island of Bali.

The deal was signed between officials of Pertamina and Korea Gas Crop. Sunarwinadi said the LNG would be shipped from Pertamina's Bontang LNG centre in east Kalimantan from 1998 to 2017.

"The deal with South Korea is another historical event because it will reaffirm Petamina's position as the biggest LNG exporter in the world in the coming years," Sunarwinadi said.

He said the deal boosted Pertamina's long-term sales to South Korea, currently at about 4.3 million tonnes a year.

"This is a great achievement....I am confident that the future will offer Indonesia and South Korea many more chances to further develop LNG trade," Sunarwinadi said.

Pertamina last week signed two LNG contracts worth some $20.3 billion to extend supply to several Japanese firms over periods ranging from eight to 11 years.

Indonesia is currently committed to exporting more than 20 million tonnes of LNG annually, mostly to Japan. Other destinations include Taiwan and South Korea.

Qatar, seen here as a potential competitor to Indonesian LNG, is due to sign a formal sales and purchase deal for 2.4 million tonnes a year of LNG with South Korea next month.

Indonesia's LNG capacity will be given a significant boost when the mammoth Natuna gas project in the South China Sea comes onstream between 2004 and 2005.-Reuter