Oil and Gas

UPDATE 1-Costa Azul LNG port to take Tangguh cargo Tuesday

* Second delivery to Costa Azul in two weeks

* Delivery part of supply agreement with Sempra

(Adds detail on terminal, background)

NEW YORK, March 29 (Reuters) - The Costa Azul liquefied natural gas terminal in northern Mexico is expected to receive a cargo from the Tangguh LNG plant in Indonesia on Tuesday, according to AISLive ship tracker on Reuters.

The Tangguh Batur tanker, which can hold up to 145,700 cubic meters of LNG, was seen nearing the terminal on Monday, the data showed. It follows the Tangguh Towuti tanker which arrived at Costa Azul last week, also from Indonesia.

The delivery is likely part of a supply agreement under which Costa Azul terminal operator Sempra Energy SRE.N will take up to 500 billion cubic feet of LNG from the BP-led BP.L Tangguh project for 20 years, with the option to divert some of these volumes to more attractive markets.

Costa Azul supplies natural gas to the United States via pipeline into the Southern Californian grid.

Deliveries from Tangguh to Costa Azul have been sporadic in recent months due to operational problems at Tangguh and low gas prices in Southern California, which have deterred shippers from sending much gas there.

A BP company official said in January that Tangguh, which began operations last July, is expected to export about 101 cargoes of LNG in 2010, up from 16 cargoes in 2009. [ID:nJAK524317] (Reporting by Edward McAllister; Editing by Marguerita Choy)