Pertamina extends LNG sales contracts for Japan

JAKARTA (JP): The state oil company Pertamina yesterday announced that it has extended two contracts for the sale of 12 million tons of liquefied natural gas (LNG) per annum to a consortium of companies operating on the western coast of Japan.

The contracts, which were signed by Pertamina's president Faisal Abda'oe and executives of the consortium on Oct. 7 in Osaka, will allow Pertamina to continue annually exports of 8.4 million tons of LNG from January 2000 through March 2009 and 3.6 million tons from April 2003 through March 2008, a Pertamina spokesman, Didi Sunarwinadi, said.

He said that the consortium, which is thus far Pertamina's biggest buyer, included Chubu Electric Power Co. Inc., Kansai Electric Power Co. Inc., Kyushu Electric Co. Inc., Nippon Steel Corporation, Osaka Gas Co. and Toho Gas Co.

Abda'oe told The Jakarta Post last week that the contracts with the consortium were an extension of the purchase agreements signed in 1973.

Abda'oe declined to elaborate details of the prices offered to the consortium, but said the price will be at 100 percent parity to Indonesian crude oil, reflecting an increase from the current 92 percent as agreed upon in 1973.

The Japanese Gekkan Sekitsu Statistics office earlier reported that as of June this year import prices of Pertamina's LNG were set at $3.23 per million British thermal units (BTU). One ton of LNG is equivalent to 51.87 million BTU.

The LNG prices fluctuated in line with oil price developments, the report said. By way of comparison, the prices of Pertamina's LNG for Japan's market were $3.03 per million BTU in January this year, $3.05 in February, $3.13 in March, $3.05 in April and $3.11 in May, the office said.

Bontang

Didi meanwhile said that the new exports to the Japan's consortium will be supplied from Pertamina's gas liquefaction plants in Bontang, East Kalimantan.

"And we expect the exports to be supplied from the seventh plant, called Train G, which will be built in Bontang and is scheduled to be on stream by 1997," he said.

The construction of Train G, which is now being negotiated with Japanese parties, will enable Pertamina to produce a total of 18 million tons of LNG per year from the Bontang LNG complex.

The construction of Train G is estimated to cost some Rp 1.2 trillion ($549.95 million), Pertamina said.

The Bontang LNG complex is supported by nearby gas fields holding total reserves of 20.35 trillion cubic feet, of which 14.35 trillion cubic feet have been committed under long-term contracts.

Indonesia annually exports more than 18 million tons of LNG to Japan, besides 5.6 million tons to South Korea and five million tons to Taiwan. (fhp)