Arun gas field halts LNG loading for South Korea<\/p>\n
SEOUL (Agencies): A vessel scheduled to load 56,000 metric
\ntons of liquefied natural gas from Indonesia's Arun gas field
\nWednesday for delivery to South Korea floats idle in Singapore
\nwaters, an official from state-run Korea Gas Corp. said on
\nWednesday.<\/p>\n
\"We are supposed to load today, but that's impossible...the
\nArun facility is closed...\" he said. \"(The tanker) is waiting
\naround in Singapore.\"<\/p>\n
The Kogas official said he was unsure exactly when it could
\nbegin loading as production from the Arun gas field had stopped
\ndue to security concerns. He said Indonesian officials had
\ncontacted Kogas and the government to inform them of the supply
\ndisruption.<\/p>\n
A spokeswoman for ExxonMobil Oil Indonesia Inc., which is the
\nsole natural gas supplier to PT Arun Gas and liquefies the
\nnatural gas before it is shipped to South Korea and Japan, said
\non Tuesday that the company suspended natural gas pumping at its
\nthree onshore blocks - Arun, Lhoksukon and Pase.<\/p>\n
The three blocks produce a total of 1.6 billion cubic feet of
\nnatural gas daily. ExxonMobil Oil Indonesia is a unit of Exxon
\nMobil Corp.<\/p>\n
The Indonesian government said Monday that it will meet LNG
\ndeliveries to South Korean and Japanese buyers with LNG from
\nBontang or will ask Malaysian and Australian producers to fill
\nthe shortage.<\/p>\n
Indonesia PT Arun NGL's liquefied natural gas production has
\nfallen by close to 90 percent from March 7 following a halt in
\nonshore Aceh gas production, a company official told Dow Jones
\nNewswires Tuesday.<\/p>\n
The only source of gas supply is now derived from North
\nSumatra offshore platform which produces around 350 million cubic
\nfeet of gas daily, officials said.<\/p>\n
PT Arun NGL's LNG inventory now stands at 399,900 cubic
\nmeters, enough for one more export shipment, the company official
\nsaid, adding that part of the inventory is reserved for its fuel
\nplant.<\/p>\n
This leaves Kogas scrambling for substitute cargoes, the
\nofficial said. Kogas had scheduled to load six LNG cargoes from
\nArun in March, each with a volume of 56,000 tons, he added.<\/p>\n
Meanwhile, an official of ExxonMobil said in Singapore on
\nWednesday that Arun condensate output has also fallen to zero
\nfollowing the company's move to halt its onshore Aceh gas
\nproduction this week, a company official told Dow Jones Newswires
\nWednesday.<\/p>\n
The onshore gas platforms were producing up to 30,000 barrels
\nof condensate daily before operations were suspended this week,
\nthe official said.<\/p>\n
Indonesian state-owned oil and gas company Pertamina and
\nExxonMobil Oil Indonesia, a unit of Exxon Mobil Corp., are
\nresponsible for marketing the Arun condensate.<\/p>\n
ExxonMobil Indonesia ships around two 250,000-barrel cargoes
\nof the condensate every month to Singapore, sources said, adding
\nthat spot availability for export was limited.<\/p>\n
The first scheduled shipment for South Korea left Arun on
\nMonday after a one-day delay in loading. The cargo is to arrive
\nin Pyongtaek March 19, Kogas has said.<\/p>\n
Kogas said Monday that in the event of a supply disruption
\nfrom Indonesia, it could easily adjust its delivery dates from
\nits other long-term suppliers - Malaysia, Brunei, Oman and Qatar.<\/p>\n
Australian LNG<\/p>\n
The Kogas official said it is also contacting Australian LNG
\nsuppliers for possible substitute volumes for March. South Korea
\ndoesn't have a term LNG contract with Australia, but has in the
\npast purchased on a spot basis, he added.<\/p>\n
Indonesian officials have informed Kogas that the situation in
\nArun may be cleared in a few weeks, but the Kogas official said
\nthe South Korean government is concerned that the supply
\ndisruption could drag into April and May. He said Kogas is asking
\nother LNG suppliers to ready substitute volumes for April and May
\nas well.<\/p>\n
Kogas has said it is scheduled to receive five loadings from
\nArun in April and four loadings in May, each with a volume of
\n56,000 tons.<\/p>\n
\"We are heading into summer season, so demand isn't so high,\"
\nhe said. \"We are still very concerned about supply...but there is
\nless pressure.\"<\/p>\n
Indonesia is still South Korea's largest LNG supplier. South
\nKorea is expected to import a total of 16.32 million tons of LNG
\nin 2001, of which 5.3 million tons will come from Indonesia, or
\n32.5 percent.<\/p>\n
In 1998, South Korea purchased 66.5 percent of its total LNG
\nimports from Indonesia. The rest was imported from Malaysia and
\nBrunei.<\/p>\n
In a related development, Tohoku Electric Power Co. said in
\nTokyo on Wednesday it was seeking alternative sources of LNG.<\/p>\n
A spokesman for the company said Tohoku was told recently by
\nIndonesia's state oil and gas company, Pertamina, that it was
\nunclear when operations would resume in Aceh's gas fields.<\/p>\n
Tohoku Electric said it has an annual contract to purchase
\nfour million tonnes of LNG, of which about three million tonnes
\ncomes from Indonesia.<\/p>\n
In addition to Indonesia, it imports LNG from Malaysia and
\nQatar.<\/p>\n
Japan's only other importer of Indonesian LNG, Tokyo Electric
\nPower Co. Inc. (TEPCO), reiterated that it was not immediately
\naffected by events in the troubled province.<\/p>\n
TEPCO, Japan's largest power company, imports 510,000 tons of
\nLNG from Arun, accounting for only 3 percent of its total LNG
\nimports.<\/p>\n
\"If the Arun problem continues for a long time, say until July
\nwhen electricity demand rises, we will start considering other
\nsteps,\" a TEPCO spokesman said.<\/p>\n
\"But we don't think it is a crisis yet.\"<\/p>\n
TEPCO has long-term contracts to buy LNG from six other
\nsuppliers, including Australia, Qatar and Malaysia.<\/p>\n
Separately, Australia's North West Shelf liquefied natural gas
\nproject in Western Australian said it is gearing up to sell
\ncargoes to customers left dry by the shut down of ExxonMobile
\nCorp.'s Arun gas fields in Indonesia.<\/p>\n
\"The Australian and Indonesian LNG industries have common
\ncustomers and we are working with those customers on options to
\nmaintain their supplies,\" a spokesman for Woodside Petroleum
\nLtd., operator of the North West Shelf, said.<\/p>",
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