Pertamina wants to be LNG seller<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
State-owned oil and gas company Pertamina has made a proposal
\nto the government to be made the sole seller of Indonesian
\nliquefied natural gas (LNG).<\/p>\n
The proposal, however, has been met with resistance from oil
\nand gas contractors.<\/p>\n
\"Pertamina has more than 25 years of experience in the
\nindustry,\" Pertamina spokesman Ridwan Nyak Baik said here on
\nThursday during a seminar on LNG.<\/p>\n
Pertamina, which handled the marketing of Indonesian LNG for
\ndecades, has been commended for helping turn Indonesia into the
\nworld's largest LNG exporter.<\/p>\n
But the new oil and gas law, which took effect last year,
\nstripped it of its monopoly over the industry, including its sole
\nright to sell Indonesian LNG. Under the new law, contractors may
\nsell their LNG by themselves.<\/p>\n
Pertamina has been transformed into a common company, with its
\nauthority over the country's oil and gas upstream sector
\ntransferred to a new agency called BP Migas.<\/p>\n
Last year, the government assigned Anglo-American energy firm
\nBP PLC, the head of the consortium that owns the Tangguh LNG
\nproject in Papua, to market the Tangguh LNG to China. It was the
\nfirst time a private company handled the marketing of Indonesian
\nliquefied natural gas.<\/p>\n
But after Indonesia lost out to Australia for a contract to
\nsupply LNG to China's Guangdong province, the government assigned
\na marketing team headed by a senior Pertamina official to follow
\nup on China's offer of the Fujian LNG contract. This contract was
\nsigned last month by Pertamina, not BP.<\/p>\n
Following its \"success\" in clinching the deal with China for
\nthe Fujian LNG contract, Pertamina has intensified its campaign
\nwith the government to be made the sole seller of LNG.<\/p>\n
And at least one local oil and gas industry expert supports
\nthis proposal.<\/p>\n
With Pertamina selling Indonesian LNG it improves the chance
\nof Indonesia winning LNG contracts, because buyers will be
\nassured of the security of supply given that Pertamina manages
\nthe Arun LNG plant in Aceh and the Bontang LNG plant in East
\nKalimantan, R.O. Hutapea said.<\/p>\n
\"If there is damage at one LNG plant, Pertamina could ask
\nother LNG plants in the country to cover its supply obligations,\"
\nHutapea said, adding that a contractor like BP did not have this
\noption.<\/p>\n
Contractors, naturally, are not terrible enthusiastic about
\nPertamina's proposal.<\/p>\n
BP, for example, said the single seller scheme would be unfair
\nfor LNG players in Indonesia, with Pertamina no longer the
\nregulator but rather a market player.<\/p>\n
Pertamina has discovered a huge gas reserve in the Donggi area
\nof South Sulawesi and plans to set up its own LNG plant there.<\/p>\n
\"The single seller scheme would spark conflicts of interest
\nfor Pertamina,\" said Briton Gerry Peereboom, the president
\ndirector of Tangguh LNG.<\/p>\n
BP is proposing a compromise that would allow contractors to
\nbe involved in the marketing of LNG.<\/p>\n
In the case of the Tangguh plant, Peereboom said, BP had
\nagreed not to sell the LNG by itself, but it was also opposed to
\nmaking Pertamina the sole seller.<\/p>\n
\"We are proposing the Tangguh Marketing Board, which consists
\nof BP Migas, Pertamina and BP,\" Peereboom said.<\/p>\n
The government has not yet decided on the matter, but Ridwan
\nsaid the government was leaning toward setting up an \"Indonesia
\nInc.\", which would have the authority to sell Indonesian LNG.<\/p>\n
The body, whose goal would be to help Indonesia retain its
\nposition as a top LNG producer, would consist of BP Migas,
\nPertamina, the Indonesian Gas Association and contractors.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-wants-to-be-lng-seller-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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