Japan to cut RI gas term

Japan to cut RI gas term

TOKYO (Reuter): Seven Japanese Liquefied Petroleum Gas (LPG) importers plan to send a delegation to Indonesia's state-owned oil firm Pertamina later this month in a bid to revise down a term premium, traders said yesterday.

Japan, currently buying Indonesian term LPG at Saudi Aramco's Contract Price (CP) plus US$12 per ton on a free on board (FOB) basis, is aiming to cut the premium to as low as $3, one LPG trader said.

The importers are likely to believe the $12.00 premium is too high considering the current sluggish freight rates for LPG vessels, traders said.

Japan's annual LPG imports from Indonesia is expected to decline from this year's two million tons to 1.5 million in 1997, and to 1.3 million in 1998 as Indonesia's domestic LPG demand grows, they added.