Indonesian parliamentarians have blamed security and legal concerns for the country's failure to win China's first major liquefied natural gas supply contract.

Tubagus Haryono, the deputy chairman of a parliamentary commission on energy affairs, says efforts had been to reassure Chinese authorities over the legal and security issues, but to no avail.

However, China did pick Indonesia's Tangguh gas field, which had also bid for the initial contract, as supplier for a second LNG project which is planned to begin operating in 2006.

In a separate development, Indonesia has started piping natural gas to Malaysia for the first time under a 20-year contract expected to generate billions of dollars profit for the country.