S. Korea to buy more natural gas from RI

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)