The country's independent oil and gas industry regulator, BP Migas, signed an MOU late last month to sell between six million to 10 million tonnes of LNG to the American company from 2007.

The sale of the gas could help kick-start the development of BP's planned US$2.8 billion LNG facility at Tangguh, which like most greenfield LNG proposals, has had problems in finding cornerstone customers.

The British company plans to source most of Sempra's LNG from a completed Tangguh facility and from the state-owned Bontang field located in East Kalimantan. Another Pertamina field - Donggi in Central Sulawesi - could also serve as a source.

Analysts have predicted that, in order to make Tangguh viable, BP needs to produce and sell at least seven million tons of LNG a year. If this latest deal is ratified Sempra may well be the cornerstone customer the Tangguh partners need to kick off the project.