S. Korea to buy more natural gas from RI
JAKARTA (JP): The Korean Gas Corporation is scheduled to initial contract agreements today for the purchase of 3.2 million tons of liquefied natural gas (LNG) per annum from the state oil company Pertamina, a senior official said yesterday.
Director General of Oil and Gas Suyitno Patmosukismo told reporters of the plan after the opening of the 15th two-day meeting of the South Korea-Indonesian Joint Committee for Mineral Resources and Energy Cooperation. He said that the Korean company will import two million tons of LNG per annum from Pertamina under a 20-year agreement, and will import six million tons of LNG under a five-year agreement, with deliveries for both contracts beginning next year.
The meeting was opened yesterday by Minister of Mines and Energy Ida Bagus Sudjana and Korea's Minister of Trade, Industry and Energy Kim Chulsu, who will also attend the initialing of the contract agreements at the Shangri-La hotel here.
Pertamina's director for foreign marketing affairs, Njoman Sudibia, said that the company currently exports 4.3 million tons of LNG per year to Korea under 20-year contracts and another 1.3 million tons a year under a short-term contract.
With the new contracts to be initialed today, Korea will import a total of 8.8 million tons of LNG per year from Indonesia, he said.
He declined to spell out the price of the LNG, but said it will be slightly higher than the current price level, which is related to oil price developments, with US$2.93 per million British thermal units (BTU). One ton of LNG is equivalent to 51.87 million BTU.
He told The Jakarta Post that Indonesia currently also exports 18.3 million tons of LNG to Japan and 1.7 million tons to Taiwan per annum. Indonesia has a total output of 26 million tons of LNG, produced from Pertamina's plants in Arun, Aceh, and in Bontang, East Kalimantan.
Consumption
Visiting Korean minister Kim said at his opening speech that around 50 percent of his country's energy consumption, including LNG, oil and coal, is imported from Indonesia.
"Korea is now importing about 100,000 barrels of crude oil per day from Indonesia," he said.
He expected that Indonesia will double its exports of oil to Korea to meet its increasing demand.
"Korea currently imports 95 percent of its energy needs and the import dependence is expected to exceed 98 percent by the end of this century," he said.
Sudjana, meanwhile, hinted that Indonesia is unlikely to meet the Korean demand for more oil due to increasing demand on the domestic market.
But Sudjana welcomed Korea's initiative to set up cooperation in the development of nuclear power in Indonesia.
South Korea currently has nine nuclear power plants in operation, with seven more units now under construction.
Kim, who is leading a number of energy officials during his four-day Indonesian visit, said Korea is committed to importing energy resources from Indonesia because "We regard Indonesia as a reliable and stable source of LNG."
"Since 1979, the inaugural year of Korea-Indonesian joint committee, bilateral trade has expanded about six-fold to reach US$4.7 billion in 1993," he added.
As a result, Korea is now Indonesia's fourth largest trading partner and Indonesia is Korea's sixth largest trading partner, he added.
Kim, who paid a courtesy call on President Soeharto yesterday, will meet with Minister of Foreign Affairs Ali Alatas, Coordinating Minister of Industry and Trade Hartarto, Minister of Trade Satrio Budiardjo Joedono and Minister of Industry Tunky Ariwibowo during his stay here. (fhp)