Thu, 27 Mar 2008
Tokyo (ANTARA News) - State-run oil and gas company PT Pertamina is currently negotiating the extension of its natural gas supply contracts with a number of gas companies in Japan, its chief, Ari Soemarno, said here Wednesday.

"Pertamina`s vice president director is now in Osaka for the negotiations. We don`t know the results yet, maybe we will tomorrow," Soemarno said after signing an agreement to provide funds for the rehabilitation of an Indonesian school in Tokyo.

The results of the negotiations with the Japanese gas companies would be reported to Energy and Mineral Resources Minister Purnomo Yusgiantoro who would arrive in Tokyo on Thursday.

Soemarno said Japan had asked Indonesia to guarantee the continuity of its energy supply which Japan needed to keep its industries in operation as well as to meet the need of its public activities.

Most energy contracts between Indonesia and Japanese companies would end in 2011, while Indonesia had hinted it intended to reduce its gas exports to Japan in order to meet increasing domestic demand.

Although Indonesia was not Japan`s largest gas supplier, the latter had to a significant extent remained dependent on supplies from Indonesia , Seomarno said.

Not long ago, the Japanese were startled by a statement by Vice President Jusuf Kalla that Indonesia was now prioritizing meeting its own need for gas rather than overseas demand.

But Kalla also said Indonesia would continue to supply LNG (liquefied natural gas) to Japan based on existing contracts until 2011 provided domestic demand for gas had been met.

According to Kalla, Indonesia had envisaged the realization of three things for the continuation of natural gas supply to Japan. The first was the opening of new gas fields in Natuna and Papua; the second, increasing the efficiency of gas-consuming industries; and the third, relocation of LNG-consuming industrial activities in Japan to Indonesia.

"If these three things can be implemented, LNG supply to Japan can be maintained in accordance with the contracts between the two countries," he said.

Japan. along with South Korea and Taiwan, is Indonesia`s traditional LNG market. In 2005, Indonesia was meeting 24 percent of Japan`s need for LNG.

At least six Japanese gas companies are currently negotiating with Pertamina to renew their LNG purchasing contracts. (*)



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