Gasex: Tokyo Gas In Talks To Buy LNG From Indonesia, Russia

BANDAR SERI BEGAWAN -- Tokyo Gas Co. (J.TYG or 9531) is currently in talks to purchase liquefied natural gas from Russia's offshore Sakhalin projects and Indonesia's Tangguh project, a senior company official said Tuesday.

"It's under negotiations now," Junichi Namiki, senior manager of Tokyo Gas's gas resources department, said on the sidelines of the Gasex 2002 conference in Brunei.

However, Namiki said he didn't know when the talks would be concluded. "It depends on supply security, flexibility and the price," he said.

A number of LNG projects - including Tangguh and Sakhalin 2 - will commence in 2005-2006. Gas production from Sakhalin 1 will likely begin around 2008.

So far, Japanese gas and power industries have been noncommittal about the Sakhalin projects and the Tangguh project.

Separately, Namiki said Tokyo Gas will complete construction of its first two LNG vessels in September 2003 and March 2005.

In the face of gas and power industry deregulation in Japan, Tokyo Gas has said it seeks opportunities to utilize the two LNG tankers.

The company hopes to venture into the spot LNG market with the completion of the two tankers, Namiki said.

-By Soozhana Choi, Dow Jones Newswires; 65-6415-4063; soozhana.choi@dowjones.com