Indonesia may cut LNG exports from Arun and Bontang

Indonesia may cut LNG exports from Arun and Bontang

Indonesia is negotiating with buyers to reduce exports from natural gas plants at Bontang in Kalimantan and Arun in Sumatra said Rachmat Sudibyo, chairman of BPMigas, Indonesia's state oil and gas regulator.

Indonesia aims to cut 30 to 35 cargoes a year from exports at Bontang because the plant has production problems, Rachmat said. He declined to describe the problems.

The government also want to cut as many as 15 export cargoes from Arun to supply more gas to Indonesia's fertilizer industry Rachmat said. Arun is contracted to supply 110 cargoes this year and 76 in 2005, said Djoko Harsono, head of marketing at BPMigas.

The government is in a talks with buyers in Japan, South Korea and Japan, Rachmat said. Bontang has a commitment to sell 355 cargoes this year and 360 in 2005, Harsono said.

Total SA, Unocal Corp. and Eni SpA and BP Plc have shares in fields that supply the Bontang plant. They are having problems meeting production targets, Harsono said, in part because of a lack of necessary equipment.

"The current increase in oil price has caused a shortage of heavy equipments such as rigs.," Harsono said. -- Bloomberg