Brunei backs combined Asia stance in LNG markets<\/p>\n
Dow Jones, Bandar Seri Begawan<\/p>\n
Asia's three major gas producing countries - Indonesia,
\nMalaysia and Brunei - should continue pursuing a policy of
\ncooperation to better compete in the global spot market,
\naccording to a top Brunei gas official.<\/p>\n
"Cooperation is something that we've done in the past but only
\non an opportunistic basis...nothing formally agreed to," said the
\nchief executive of Brunei Liquefied Natural Gas Sdn. Bhd.,
\nHamdillah Abdul Wahab.<\/p>\n
In an interview with Dow Jones Newswires conducted Wednesday,
\nhe said Brunei, Malaysia and Indonesia are now studying the
\ncompatibility of their LNG vessels to each other's loading ports
\nas an initial step to putting a formal structure on the pursuit
\nof increased cooperation.<\/p>\n
Compatibility of vessels to ports is key in order for the
\nthree countries to better compete in global spot LNG trades.<\/p>\n
The mix-and-match of vessels and cargoes is already happening,
\nHamdillah said.<\/p>\n
Last year, Malaysia's state-owned oil and gas company
\nPetroliam Nasional Bhd., or Petronas, used a Brunei LNG vessel to
\ndeliver a spot gas cargo, Hamdillah said.<\/p>\n
Given uncertainties in demand from the region's main term
\nbuyers - South Korea and Japan - Indonesia, Brunei and Malaysia
\nshould be prepared to take advantage of any opportunities to sell
\nany unsold cargoes on spot trade, he added.<\/p>\n
Due to recent lower demand from Japan and South Korea caused
\nboth by the economic slowdown and the usual summer season slump,
\nBrunei LNG was in a position to sell spot cargoes this month.<\/p>\n
He said its term buyers took a lower volume, although still
\nwithin contractual obligations, but left Brunei with unclaimed
\nvolume.<\/p>\n
Brunei LNG then sold those cargoes. The company delivered a
\nshipment of about 120,000 cubic meters of LNG to the U.S. and
\n75,000 cubic meters of LNG to Spain in mid-May.<\/p>\n
Hamdillah said Brunei has sold another spot cargo, it's third
\nfor the year, to Spain for delivery in June or July. The cargo
\nsize is about 125,000 cubic meters of gas.<\/p>\n
Currently, about 2.5 percent of Brunei's LNG sales are on the
\nspot market, Hamdillah said. The rest is sold in term contracts
\nto South Korea and Japan, which imports about 90 percent of its
\ntotal LNG production.<\/p>\n
"Spot sales will continue to account for a very small portion
\nof our business," Hamdillah said.<\/p>\n
"According to our master plan, we plan to seek an extension of
\nexisting contracts (with our Japanese buyers) beyond 2013," he
\nadded, referring to the year Brunei LNG's contracts with Tokyo
\nElectric Power Co., Tokyo Gas Co. and Osaka Gas Co. expire.<\/p>\n
Hamdillah said gas consumers, including South Korea and Japan,
\nwill also benefit from greater cooperation among the three
\nproducers.<\/p>\n
Any disruption in supply from one country can be offset by
\nsupply from another under this cooperative pact, such as when
\nMalaysia provided LNG to offset the halt in production from
\nIndonesia's Arun gas field last year, he said.<\/p>\n
Conflicts in the Indonesian province of Aceh where the Arun
\nfield is located have posed security problems for gas operator
\nExxonMobil Oil Indonesia Inc., forcing it to halt production for
\nfive months in 2001 and disrupting LNG exports from Indonesia.
\nThe long-standing dispute between local separatist group Free
\nAceh Movement and the central government in Jakarta remains
\nunresolved.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/brunei-backs-combined-asia-stance-in-lng-markets-1447893297",
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