Japan LNG buyer relaxed despite Aceh uncertainty
Japan LNG buyer relaxed despite Aceh uncertainty
TOKYO (Reuters): Japan's Tohoku Electric Power Co Inc said on
Monday it saw no immediate need to seek alternative liquefied
natural gas (LNG) cargoes beyond September, despite uncertainty
about the resumption of Indonesian supplies.
ExxonMobil Oil Indonesia Inc. said earlier on Monday that it
was prepared to wait indefinitely for security conditions to
improve before reopening three gas fields in the rebellious
province of Aceh.
It was forced to shut down temporarily its fields in the
province on the island of Sumatra in early March.
A spokesman for Tohoku Electric, Japan's fourth largest
electric power utility, reiterated that the company -- the main
Japanese buyer of Indonesian LNG -- was confident of being able
to cover its LNG needs until September through term contracts,
alternative supplies from Indonesia and spot purchases.
He said the company did not wish to make LNG purchases beyond
September for fear of being saddled with more than it needed.
"We do not want to end up having more LNG than we need after
the gas field reopens," he said.
State oil and gas company Pertamina said that Japan and South
Korea had so far been very understanding.
"Japan knows that we have been a very reliable LNG supplier in
the past, and that the security issue is beyond our control,"
said Pertamina president Baihaki Hakim.
ExxonMobil shut down its operations in March due to persistent
security problems caused by armed groups believed to be members
of the Free Aceh Movement (GAM). The disruption of production
forced nearby liquefied natural gas (LNG) producer PT Arun NGL
Co. which is co-owned by ExxonMobil and Pertamina, to stop its
LNG production and exports.
Despite a military reinforcement of three battalions to guard
the company's facilities, gunfights in the area still occur,
dimming hopes for the company to resume its operations in the
near future.
At present, Indonesia is covering the shortfall from PT Arun
with supplies from the Bontang LNG plant in East Kalimantan.
But Pertamina warned that by June Bontang's excess LNG
supplies will have run out, leaving the country to rely on other
LNG producers like Malaysia or Brunei.
Pertamina's Baihaki said that this week he would meet LNG
producers in Malaysia and Brunei to discuss the possibility of
the two countries covering the LNG shortfall from PT Arun.
The move, however, may cost Indonesia a loss of around US$100
million a month in export revenues, according to Pertamina.
Baihaki said Pertamina and ExxonMobil were preparing for a
limited operation of two LNG trains at PT Arun.
The measure, he said, would ensure that operations could
immediately resume once security conditions allowed it to do so.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said the government hoped that ExxonMobil could resume operations
sometime this month.
But ExxonMobil officials said any estimate on when the company
could operate again would be speculative at present.
Exxon Mobil Indonesia is a unit of U.S.-based energy giant
Exxon Mobil Corp.(bkm)