Japanese firms, Pertamina renew in LNG contracts
JAKARTA (JP): State-owned oil company Pertamina signed agreements yesterday to extend two liquefied natural gas export contracts with Japanese buyers worth a total of US$20.3 billion
The first contract, which was signed in 1973, will be extended for 11 years starting from January, 2000, with an annual delivery of 8.4 million tons.
The second contract, which was signed in 1981, will be extended for eight years starting from April, 2003, with an annual shipment of 3.6 million tons.
"The total volume of 121.7 million tons will be supplied by Train-G, the seventh LNG production train, at the Bontang LNG plant in East Kalimantan which will be supported by new gas reserves discovered by Total Indonesie, Vico Indonesia and Unocal Indonesia," Pertamina's President Faisal Abda'oe said.
Abda'oe said the seventh production train in Bontang is scheduled to come on stream in 1997, thereby increasing the Bontang plant's total capacity to 18 million tons a year, making it the largest single-site plant in the world.
Pertamina currently operates six LNG trains in Bontang and another six in Arun, Aceh, with a combined total production capacity of over 25 million tons per year.
Abda'oe said that the first contract involves Chubu Electric, the Kansai Electric Power Co., Kyushu Electric Co., Nippon Steel Corp., Osaka Gas Co. Ltd. and Toho Gas Co. Ltd. as buyers.
The Japanese buyers covered by the second contract include Chubu Electric Power, the Kansai Electric Power, Osaka Gas Co. Ltd. and Toho Gas Co. Ltd., Asaka Gas, Toho Gas, Jilco and Nissho Iwai.
He said Indonesia exports annually an average of 18.8 million tons of LNG to Japan, or 45 percent of Japan's total imports, 5.6 million tons to South Korea and 1.7 million tons to Taiwan.
Besides Indonesia, the LNG suppliers to the Japanese market also include Malaysia, Qatar, Brunei, Australia, Yemen and Oman, he added.
Minister of Mines and Energy I.B. Sudjana, who witnessed the contract signing, said that the extension of the LNG contracts reflects the confidence of Japanese buyers in Indonesia, which is now facing stronger competition from other LNG suppliers.
"This is the biggest LNG contract in the world," he said.
He added that the government may invite the Japanese buyers to buy LNG from the Natuna gas project in the South China Sea, which is currently under preparation for development.
The US$40 billion Natuna gas project will be developed by Pertamina in a joint venture with Exxon Corp. of the United States.
Sudjana noted that the Asia-Pacific region, known as the most dynamic regional economy in the world, will depend increasingly on energy supplies from other regions.
"It is in this context that we see the important role of the Natuna gas project," he explained.(04)