Tue, 23 May 2000

Pertamina reviews tanker deal

JAKARTA (JP): State oil and gas company PT Pertamina said on Monday it had agreed with tanker consortium Pacific LNG Transport Ltd. -- linked with former President Soeharto's family -- to cut the transportation cost of its liquefied natural gas (LNG).

Pertamina's spokesman Ramli Djaafar said in a statement the cut would enable Pertamina to prevent a potential loss of US$60 million throughout the contract period of 2000 to 2010.

He said the agreement was reached early this year after 16 months of negotiations beginning in September 1998.

Pacific LNG Transport Ltd, which operates the Dwiputra LNG tanker, is owned by Humpuss Group and a group of Japanese shipping companies.

Humpuss is controlled by Soeharto's son Hutomo Mandala Putra.

According to Ramli, Pertamina was pressured by Humpuss to award Pacific a contract to transport its LNG to Japanese buyers despite its high transportation costs.

After Soeharto's downfall in the middle of 1998, Pertamina sought to renegotiate the transportation costs.

Ramli said under the latest agreement with Pacific, all Humpuss' shares would be bought out by its Japanese partners Mitusi OSK Line, NYK and Nissho Iwai. (jsk)