RI Seeks LNG Term Contracts With Oman, Qatar (
RI Seeks LNG Term Contracts With Oman, Qatar (
Bloomberg/Jakarta
Indonesia, the world's largest exporter of liquefied natural gas, is seeking to buy the fuel under term contracts from Oman and Qatar until 2008, State Enterprises Minister Sugiharto said.
"We want to make sure that we have a more medium term supply of LNG until 2008 instead of buying just one or two cargoes," Sugiharto told reporters in Jakarta today. Sugiharto said he would visit Qatar and Oman in September to negotiate the contracts.
Indonesia needs to buy to LNG to meet commitments to supply customers and bridge a shortfall until 2008 when gas is scheduled to flow from fields operated by ConocoPhillips. The nation's output of the fuel has declined as reserves in the Arun fields operated by Exxon Mobil Corp. in Aceh province become depleted.
The country will ship the gas to customers in northeast Asia to meet the obligations of PT Arun NGL, the smaller of its two LNG plants. The government wants to divert some gas from Exxon's fields to fertilizer plants to avoid their closure and to help rebuild the economy, devastated by December's earthquake and tsunami.
Indonesia, through its state oil company PT Pertamina, has previously used the spot market to buy additional LNG for its export commitments.
LNG producers in Australia and Malaysia may be interested in offering Indonesia term contracts because of their proximity to the southeast Asian country, said Tony Regan, a director of Tri- Zen, a Singapore-based energy consultant.
Gas from Russia's Sakhalin-2 project, which is being developed to start producing LNG in 2007, may be considered for the latter part of the period "and they would have a huge logistical advantage compared with LNG from the Middle East," Regan said. "Another interesting option would be Egypt."
Pertamina, the operator of the country's two LNG plants, is seeking one cargo from the spot market after Exxon agreed last week to divert some gas to the fertilizer plants, Kardaya Warnika, chairman of state oil regulator BPMigas, said July 11. Pertamina will ship the cargo of 125,000 cubic meters to meet commitments in the August-December period, he said.
Pertamina last year bought an LNG cargo from Oman to meet customer contracts after output from the Arun plant fell because the government asked Exxon to divert gas to fertilizer makers. The Arun plant has commitments to export 75 LNG cargoes this year.