Kogas to buy up to 1m tons of LNG

The Jakarta Post Jakarta

South Korean gas company Korean Gas (Kogas) is looking to buy up to one million tons per annum of liquefied natural gas from Indonesia as part of a short term contract, an official said on Thursday.

"They want a short term contract of between 5 and 7 years, and we expect to reach a deal by February 2004," Eddy Purwanto, deputy for marketing with the Oil and Gas Implementing Body (BP Migas), told reporters on Thursday as quoted by Antara.

Eddy said the volume would be between 500,000 tons and one million tons.

He added that BP Migas had met with Kogas to clinch a new short term contract. As for a long term contract, Eddy said, this would be up to the South Korean Minister of Energy (MOSI).

At present, Indonesia is seeking an extension to the contract it has with MOSI for 2.3 million tons a year from the Arun LNG plants, Eddy said. The contract with Kogas is due to expire in 2007.

Even if Indonesia managed to secure a long-term contract, gas supplies would also be offered from Indonesia's future third LNG plant, called the Tangguh plant, located in Papua province, or from the Bontang LNG plant in East Kalimantan.

South Korea is one of the traditional buyers of Indonesian LNG. Other buyers are Japan and Taiwan.

The government has been struggling to maintain the traditional markets for Indonesia's LNG amid increasingly fierce competition with the emergence of new players such as Malaysia and Australia.

Indonesia is the largest LNG exporter in the world with a total output of around 31.6 million tons per annum.