Bank of China has expressed agreement to disburse US$1 billion in loan to finance the liquefied natural gas (LNG) project at Tangguh gas field, an Indonesian official said Wednesday.  

"Bank of China agreed to disburse more than US$1 billion during a recent meeting with us," Kardaya Warnika, deputy head of the Indonesian oil and gas executive board (BP Migas), was quoted as saying by Detikcom online news service.

He added Japan is also interested in investing in the project through the Japan Bank for International Cooperation (JBIC) but no commitment has been mutually signed.

"It's more likely that China will become the major financier oft his project," he said.

Located in the easternmost province of Papua, the Tangguh gas field is the major gas source for the government's LNG export.

The field is projected to supply 2.7 million tons of LNG a year to China's Fujian Province starting in 2007 and the government has planned to supply 1.5 million tons a year to the Republic of Korea also from Tangguh.

Last December, the government and Beyond Petroleum (BP) signed an agreement with Sempra Energy LNG Corp for a 20-year supply of LNG to US and Mexican markets.

Under the agreement, 3.7 million tons of LNG a year will be delivered from Tangguh over a period of 15 years.

(Xinhua News Agency March 4, 2004)