PT Arun NGL Co. may have to reduce output by 2004<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina said on
\nThursday that its liquefied natural gas (LNG) subsidiary PT Arun
\nNGL Co, based in Aceh, may have to reduce its output in five
\nyears due to a decrease in demand.<\/p>\n
The head of Pertamina's foreign contractors management body,
\nGatot K. Wiroyudo, said Arun's sales contracts with some Japanese
\nbuyers would expire in 2004.<\/p>\n
So far, the Japanese buyers have not confirmed that they will
\nextend their contracts.<\/p>\n
\"If they don't want to extend the contracts we shall look for
\nalternative buyers.<\/p>\n
\"If there are no buyers, Arun has to reduce its output. But,
\nif we can find new buyers, the LNG plant may have to increase
\noutput,\" Gatot said.<\/p>\n
Arun, named after the gas field in North Aceh discovered and
\nbeing developed by American energy company Mobil Corp, currently
\nproduces 8.5 million tons of LNG per year.<\/p>\n
Under the 20-year contract expiring in 2004, Arun has to
\nsupply Tohoku and Tokyo EPC with 3.51 million tons of LNG per
\nyear.<\/p>\n
In the past, Pertamina has always successfully extended sales
\ncontracts with its LNG buyers, including those in Japan, South
\nKorea and Taiwan.<\/p>\n
In 1995, Pertamina signed agreements with its Japanese and
\nKorean buyers to extend three LNG sales contracts, worth US$23.7
\nbillion, to between year 2010 and 2018. The contract extension
\nagreements were signed between three years and eight years ahead
\nof the expiration of the contracts.<\/p>\n
Pertamina data say Arun is 55 percent owned by Pertamina, 30
\npercent by Mobil and 15 percent by its Japanese buyers grouped in
\nthe Japan Indonesia LNG Co.<\/p>\n
Aside from Arun, Indonesia has another LNG center in Badak,
\nBontang, East Kalimantan, with seven trains producing 18.5
\nmillion tons of LNG per year.<\/p>\n
The Wiriagar area in Irian Jaya is projected to be the
\ncountry's third LNG center following the recent discovery of a
\nhuge gas reserve in the area by American energy company Atlantic
\nRichfield Company (Arco).<\/p>\n
But, Pertamina and Arco have not begun developing the so-
\ncalled Tangguh project as they have yet to find buyers for the
\nLNG to be produced at the planned plant.<\/p>\n
Indonesia is the world's largest LNG exporter, with export
\nvolume reaching some 10 million tons per annum. (jsk)<\/p>",
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