Korea Gas Corp. to visit Arun gas field in August

Korea Gas Corp. to visit Arun gas field in August

SEOUL (Dow Jones): State-run Korea Gas Corp., or Kogas, hopes to conduct a due-diligence on Arun gas field in Indonesia at the end of August to decide a date to restart liquefied natural gas import, a company official said Monday.

"We suggested that we see for ourselves if Arun is safe and if productions are going well...to secure safe LNG supply in the future," the official said. But the due-diligence date hasn't been set yet, he added.

Representatives from Kogas were in Jakarta last week to discuss when to resume importing LNG from the Arun gas field in Aceh province but no decision has been made, the official said.

Indonesia's national oil and gas company Pertamina had asked South Korea to buy LNG from Arun beginning August but South Korea doesn't have room to receive the volume until October, officials from Kogas and the energy ministry have said.

Last week, a Pertamina's spokesman said the company expects excess LNG capacity August through September to reach 750,000- 875,000 metric tons because Kogas has covered its requirement in that period from another source.

Pertamina is trying to dispose of the excess LNG available up to September in the spot market, he said.

B"Hopefully, Kogas will resume Arun LNG loadings from October onwards," the Pertamina spokesman said.

ExxonMobil Indonesia shut its onshore gas operations in the restive Aceh province in March, citing security concerns. As a result, LNG exports were halted.

ExxonMobil Indonesia is a unit of Exxon Mobil Corp.

Indonesia is South Korea's largest LNG supplier. South Korea has a long-term contract with Indonesia to import 5.3 million tons of LNG a year.

South Korea also receives 11.56 million tons of LNG a year from its other contract LNG suppliers, Malaysia, Qatar, Oman and Brunei.