Two Arun LNG trains to be shut<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina and its
\nAmerican partner Mobil Oil Indonesia will soon close two of their
\nsix liquefied natural gas (LNG) trains in Arun, Aceh, industrial
\nsources in Singapore said on Friday.<\/p>\n
The sources told The Jakarta Post that one train would be
\nclosed on Monday, followed by another around March.<\/p>\n
Spokesman for Pertamina's Foreign Contractors Management Body
\n(BPPKA) Sidick A Nitikusuma confirmed that two of the six trains
\nwould be closed \"soon\".<\/p>\n
Sources said the closure was caused by a decrease in natural
\ngas supplies to the plant.<\/p>\n
They said the gas resources in the Arun field had been
\nseverely depleted while Pertamina and Mobil had canceled the
\nexploration of new gas in the province due to security problems.<\/p>\n
Aceh has been hit by violence for about one and a half years
\nas the Free-Aceh separatist group intensified campaigns for
\nindependence following the resignation of former president
\nSoeharto in mid-1998.<\/p>\n
Other sources said the closure was related to violence in the
\nprovince, but Sidick denied this.<\/p>\n
\"The closure is related to the decision of Japanese buyers to
\ncut LNG imports from the plant, not because of security
\nconcerns,\" Sidick told the Post.<\/p>\n
Earlier, Nihon Keizai Shimbun reported that Tohoku Electric
\nPower Co. and Tokyo Electric Power Co. (Tepco) would cut LNG
\nimports from Indonesia by 2.5 million metric tons to a combined
\none million tons a year, after the current contract expires in
\nDecember 2004.<\/p>\n
The utilities believe large-volume imports under a long-term
\ncontract would carry risks amid intensifying competition and slow
\ngrowth in electricity demand. Production capacity at the Sumatra
\ngas field is also falling.<\/p>\n
Tohoku Electric Co. will reduce imports to about 850,000 tons
\nfrom three million tons, while Tepco will cut imports to some
\n150,000 tons from 500,000 tons.<\/p>\n
The new contract the firms are expected to sign with Pertamina
\nin April will be shortened to between five and 10 years from the
\ncurrent 21, according to the paper.<\/p>\n
Pertamina data says the six trains of Arun LNG plant currently
\nproduce a combined 12.3 million tons of LNG per year. The closure
\nof the two trains will cut the plant's output by about four tons.<\/p>\n
Aside from Japanese buyers, the Arun LNG plant also supplies
\nLNG to Taiwan and South Korea.<\/p>\n
The LNG plant was built several years after Mobil found a gas
\nreserve of 14 trillion cubic feet and a condensate reserve of 950
\nmillion barrels in the Arun field, which is also called the B
\nBlock, in 1971.<\/p>\n
Indonesia is the world's largest LNG exporter.<\/p>\n
Aside from Arun, Indonesia has another LNG center in Badak,
\nBontang, East Kalimantan, which currently has eight LNG trains
\nwith a total output of 21.4 tons per year. (jsk)<\/p>",
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