Arun runs out of gas; LNG exports halted

JAKARTA (JP): The Aceh-based liquefied natural gas (LNG) producer PT Arun NGL Co has completely ceased its liquefied exports because its natural gas supplies are now only capable of fueling the company's power generators, an official at state oil and gas company Pertamina said on Friday.

Spokesman for Pertamina's production-sharing management directorate Sidick Nitikusuma said that PT Arun had run out of natural gas stocks for future shipments.

"Arun is receiving just enough gas to keep its machines running," Sidick told The Jakarta Post.

Since 1978, the Arun plant has never experienced an interruption in its LNG exports to Korea and Japan, a feat that has established Indonesia's reputation as a reliable LNG supplier.

The Arun plant stopped its LNG shipments after its only natural gas supplier, the American-based ExxonMobil Oil Indonesia Inc., suspended operations one week ago.

ExxonMobil suspended the pumping of natural gas after experiencing security problems with members of the Free Aceh Movement (GAM).

The company was initially expected to resume operations within a week after closing down on March 9.

However, with deteriorating security conditions, ExxonMobil instead evacuated its workers, leaving only a skeleton staff to perform maintenance duties.

Sidick said that Arun loaded its last LNG cargo, carrying about 125,000 metric tons of LNG for Japan, on Monday.

This week, Arun was expected to load a second shipment bound for Korea, he said, but the vessel, Golar Spirit, turned down the job because of security concerns.

The vessel would instead sail for the Bontang LNG plant in East Kalimantan to load its cargo for Korea, he said.

The government decided to divert the LNG supply from Arun to the Bontang plant as a measure to stall a complete halt in LNG exports.

Korea has already begun seeking LNG supplies elsewhere, fearing that ExxonMobil's closure would drag on for several months.

Malaysia and Australia have expressed their readiness to substitute Indonesia's LNG exports if Bontang's supplies are exhausted.

But it also remains unclear whether Bontang is prepared to facilitate loading of the Golar Spirit with LNG.

An official at Pertamina said Bontang was prepared to take over the Arun LNG shipments.

Sidick added that the Bontang NGL plant could cover Arun's unfulfilled LNG export orders for one month at the most.

Bontang has a production capacity of approximately 22 million metric tons of LNG per year, compared to Arun's LNG output of 11 million tons.

ExxonMobil Oil spokesman Julia Tumengkol said that natural gas output has dropped to 350 million cubic feet of gas per day, down from 1.6 billion cubic feet of gas per day.

The only gas field still operating, she said, was the North Sumatra Offshore, because no GAM forces threatened operations there.

She said the other three gas fields, Arun, Lhoksukon, and Pasee, remained closed.

"So far there is no change in developments," she told the Post.

Sidick was also skeptical about ExxonMobil resuming operations soon, given that military operations against the local rebels have yet to begin.

He said that several Indonesian armed forces officers had recently met Pertamina and ExxonMobil officials to roughly outline the security measures to be taken against GAM.

The army, he said, would send more soldiers, equip them with armored vehicles and deploy anti-guerrilla troops to suppress the rebels.

But Pertamina and ExxonMobil remained unconvinced, he added.

"The military said that it would be safe to resume operations, but we wondered how that could be possible with all the GAM forces still roaming around the area," he said.(bkm)