Korea Gas may drop one LNG shipment from RI: Pertamina
Korea Gas may drop one LNG shipment from RI: Pertamina
Leony Aurora, The Jakarta Post/Jakarta
Indonesia's major liquefied natural gas (LNG) buyer Korea Gas may
drop one shipment of LNG from the country, a top executive of
state oil and gas firm PT Pertamina says.
Korea and Taiwan participated in a tender to get LNG shipments
from Nigeria, which Pertamina also took part in as it needs to
secure gas supplies for fertilizer firms in Nanggroe Aceh
Darussalam, the firm's trading and marketing director Ari
Soemarno told reporters on Friday.
"It would be better for (Korea Gas) to drop one shipment from
Indonesia and buy it directly from the producer (Nigeria),"
Ari said.
Indonesia attempted to reschedule LNG shipments to its Asian
buyers as fertilizer plants in Aceh were threatened with shut
down due to a shortage of natural gas, an element vital in the
production process, as its contract with ExxonMobil expired.
However, with Japan, South Korea and Taiwan refusing to delay
shipments, Pertamina has been trying to get LNG shipments on the
spot market to swap the contracted shipment to buyers.
The Oil and Gas Upstream Regulatory Agency's (BP Migas) deputy
of marketing, finance and economy Eddy Purwanto said the shipment
to be dropped would have come from PT Arun NGL, the plant located
in Aceh.
"Korea Gas has indicated that it may drop one shipment," said
Eddy. "Pertamina will negotiate the details."
Ari said that it was still unclear who would cover the price
difference between the contracted cargo and the spot market. "BP
Migas needs to discuss this," he said.
Exxon has continued to supply fertilizer producer PT Pupuk
Iskandar Muda (PIM) in Aceh after its contract expired in July as
the government has guaranteed to find one shipment of LNG to
replace the gas.
One shipment of LNG is enough to run one plant, with a
capacity of 1,700 tons per day, for between 50 and 60 days.
Amid the gas shortage, the government has allowed the
Lhokseumawe-based PIM to export its products so that it can
afford to pay the higher prices for gas.
However, PIM has said that it can only pay $6.55 per million
British thermal unit (mmbtu) at the highest, or about $19 million
per shipment. A shipment of LNG can typically be sold for around
$25 million on the spot market. The government has made a
commitment to cover any additional costs.
Indonesia has two LNG plants, namely PT Badak NGL in Bontang,
East Kalimantan, and Arun. Falling output from the aging gas
fields surrounding the plants has caused gas output to fall in
recent years.