Under the non-exclusive MoU, in phase one EWC will supply 1.5 million tonnes of LNG per annum to Indonesia Power's power plants in Tanjung Priok, Tambak Lorok and Bali, replacing their existing use of diesel fuel.

This will ramp up to 5MMtpa under Phase II of the agreement.

EWC said it expects to reach a heads of agreement with Indonesia Power for the gas sales and purchases by year-end.

The company added that while the current MoU is non-exclusive and discussions with other potential Asian LNG buyers continue, the MoU marks a significant step in underpinning the Sengkang LNG plant.

Sengkang LNG will be EWC's second LNG facility and the first plant configured using modular liquefaction components.

The facility will have an initial capacity of 2 million tonnes per annum built from 500,000tpa units.

The LNG plant is expected to be operational by the end of 2009.