Pertamina urges dialog with Malaysia, Brunei on LNG sales<\/p>\n
SINGAPORE (Reuters): Indonesia's state-run oil firm Pertamina
\nurged on Wednesday for close dialogue with Brunei and Malaysia
\nover sales of liquefied natural gas (LNG) in Asia and outside of
\nthe region.<\/p>\n
Pertamina President Baihaki Hakim said the three countries,
\nwhich are in the world's top six LNG exporters, may have to
\nrethink how projects are developed to maintain a dominant role in
\nthe Asian LNG market.<\/p>\n
Deregulation in big consumers such as Japan and South Korea,
\nas well as increasing spot LNG sales, were altering the dynamics
\nof the market, he said.<\/p>\n
\"The buyers, especially from Japan, Taiwan, Korea, and even
\nChina, are demanding more flexibility in terms because of
\nderegulation in these countries and the stiff competition,\" Hakim
\ntold reporters on the sidelines of the 26th ASEAN Council on
\nPetroleum meeting in Singapore.<\/p>\n
\"But we cannot deal with all their demands. Pertamina is
\npromoting closer dialogue with Malaysia and Brunei, I think we
\nare going to have a united approach when dealing with the
\ndynamics we are facing in the LNG market,\" he said.<\/p>\n
Hakim said buyers were unhappy with current supply terms and
\nwanted a review take-or-pay deals and shorter timeframes for
\nlong-term deals. They also were asking for more flexibility in
\nvolumes and the number of cargoes, and also pricing mechanisms.<\/p>\n
Indonesia was the world's biggest exporter of LNG in 1999 with
\nMalaysia and third position and Brunei in sixth.<\/p>\n
Hakim said one way to counter buyers' increasing demands might
\nbe for producers to take a more proactive role in developing
\nprojects by securing loans and finding transportation solutions.<\/p>\n
Historically, buyers have dominated projects by securing
\nproject financing and arranging their own transport. Supply
\ncontracts often favoured buyers' interests because of the need to
\nsatisfy lenders, he said.<\/p>\n
\"Let the buyers just be buyers now,\" he said.<\/p>\n
Hakim said Pertamina was seeing demand for spot LNG cargoes
\ninto the U.S. West Coast and also foresaw the possibility of swap
\ndeals with suppliers in the Middle East and Africa.<\/p>\n
He said Indonesia sold nine spot cargoes last year and this
\nwas expected to grow.<\/p>\n
President of Malaysia's Petronas, Hassan Marican, said the
\nstate-run oil firm first began spot LNG exports in 1999 and had
\ncontinued to ship product abroad on a spot basis last year.<\/p>\n
He said Petronas' cargoes had headed to Europe and the U.S.
\nEast Coast.<\/p>\n
The company has five new LNG carriers on order and options for
\none more vessel.<\/p>",
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