Pertamina assigned to sell LNG to S.Korea, Taiwan
Fitri Wulandari, The Jakarta Post, Jakarta
The Oil and Gas Implementing Body (BP Migas) has appointed state oil and gas company PT Pertamina as the sole agent to market Indonesian liquefied natural gas (LNG) to South Korea and Taiwan.
Agency head Rachmat Sudibyo, said on Thursday that production- sharing contractors had agreed, in principal, to appoint Pertamina to market their LNG to South Korea and Taiwan.
"We are finalizing terms and conditions for the appointment (of Pertamina as sales agent) with LNG producers such as Total, Unocal, Vico and BP Indonesia for Tangguh," Rachmat said after a hearing with House Commission VIII for mines and energy.
Pertamina will be assigned to negotiate the extension of existing LNG purchase contracts, as well as to find new buyers from both countries, Rachmat said.
Indonesia has contracts with South Korea's Korea Gas (Kogas) and Taiwan's China Petroleum Company, which are scheduled to expire in 2007 and 2009 respectively.
Indonesia is one of the largest LNG exporters in the world. It has two LNG plants, located in East Kalimantan's Bontang and Aceh's Arun, with a combined capacity of 31 million tons per annum.
South Korea and Taiwan are respectively the second and third largest LNG markets for Indonesia after Japan. LNG exports to South Korea and Taiwan make up 19 percent and 13 percent respectively of Indonesia's total exports of 27 million tons per annum. The bulk of LNG exports goes to Japan.
BP Migas added it is also in the process of negotiations to export an additional 50 million cubic feet per day (MMSCFD) of natural gas to Singapore.
"Singapore has asked for more natural gas supply since last year," Djoko Harsono, the head of BP Migas' marketing division said.
According to him, the natural gas would be supplied through pipelines from Natuna island for a period of 12 years. The additional supply would provide an estimated revenue of $770 million for Indonesia.
Indonesia now supplies Singapore with natural gas from west of the Natuna islands and central Sumatra through pipelines.