S. Korea imports more natural gas from Indonesia

JAKARTA (JP): South Korea will buy an additional 3.92 million tons of liquefied natural gas (LNG) worth about US$600 million from Indonesia during the period of 1996 to 1999.

State-owned oil company Pertamina's president, Faisal Abda'oe, and Korea Gas Corporation's president, Han Kap Soo, signed a contract for the additional purchase of LNG in Kuta, Bali, yesterday.

"Based on the contract we will export 0.17 million tons of LNG to South Korea this year, 1.23 million tons next year and 1.29 million tons in 1998," said Abda'oe as reported by Antara.

He said that the gas price will be tied to the prices of crude oil on the world market.

"Assuming that the crude oil price upon the LNG delivery is $18 per barrel, our gross sales will be $600 million," he said.

The purchase agreement is Indonesia's second medium term contract with South Korea. The first one was signed in 1994 with a committed volume of 6.08 million tons for the 1995/1999 period.

Pertamina earlier secured three long-term contracts with Korea Gas Corporation. The first long-term contract for the 1986/2007 period is for 2.3 million tons per year.

The second deal for the 1994/2014 period calls for the shipment of 2.05 million tons per year and the third for the 1998/2017 period for 1.02 million tons per year.

According to Abda'oe, all the LNG to be exported to South Korea will be derived from the Bontang LNG plant.

Currently, six LNG plants -- trains A to F -- are in operation in Bontang. The seventh plant -- train G -- will be in operation in 1997, while train H will start operating in 1999.

Korea Gas Corporation President Han Ka Soo noted that every year South Korea needs 10 million tons of LNG, of which 70 percent is imported from Indonesia. The other 30 percent is imported from Malaysia, Brunei and Australia.

He said that Indonesia's total LNG exports to South Korea during the period of 1986 to 1995 reached 29.2 million tons.

Indonesia, the largest producer of LNG in the world, exports LNG to Japan, South Korea and Taiwan.

"Our total exports to the three countries now reach 24.8 million tons per year," said Abda'oe.

He noted that exports to Japan alone reach 17.6 million tons per year, to South Korea 5.3 million tons and to Taiwan 1.9 million tons.

"With our expansion in Bontang and the new discoveries of gas reserves in Natuna and Irian Jaya, we expect to increase our LNG exports to 27 million tons per year in 2003," he said.

Abda'oe said that the Natuna gas field is estimated to contain 46 trillion cubic feet of natural gas, and Irian Jaya eight trillion cubic feet.

According to official data, Indonesia's natural gas reserves are 266.7 trillion cubic feet, while proven reserves total 114.9 trillion cubic feet.(13)