S. Korea to raise LNG imports from RI
JAKARTA (JP): South Korea, which now annually imports 5.6 million tons of liquefied natural gas (LNG) from Indonesia, yesterday confirmed an import increase by initialing contract agreements for the deliveries of another 2.2 million tons a year.
The agreements were approved by the executive vice president of the Korean Gas Corporation (KGC), In-Young Choi, and the senior vice president for corporate affairs of the state oil company Pertamina, Baharuddin, in a ceremony at the Shangri-La hotel here yesterday. The ceremony was attended by Minister of Energy and Mines Ida Bagus Sudjana and Korean Minister of Trade, Industry and Energy Kim Chulsu.
Pertamina's president Faisal Abda'oe explained that the agreements consisted of two parts, including a contract for Korea's purchase of six million tons of LNG to be delivered within five consecutive years starting next year and a 20-year memorandum of mutual intent for imports of one ton of LNG per year beginning 1989.
The planned import is lower than the estimated 3.2-million tons disclosed by an Indonesian official before the final negotiations on the first day of the 15th meeting of the South Korean-Indonesian Joint Committee for Mineral Resources and Energy Cooperation on Thursday.
South Korea currently spends about US$700 million to $1 billion per annum for imports of LNG from Indonesia. An informed source told The Jakarta Post that South Korea needs around $1 billion per year for imports of LNG from Pertamina starting this year.
Increase
"We hope Indonesia will increase its LNG exports to Korea in the future because our country will still need additional imports of 4.5 million tons per year by the year 2000," Korean minister Kim told reporters after the initialing of the agreements.
He said Korea is still negotiating with Qatar to help supply its domestic demand for LNG.
He said that Korea felt comfortable with the prices of LNG offered by Indonesia. He added that his party had no difficulty in negotiating with Indonesian officials on prices.
Pertamina's director for foreign marketing affairs, Njoman Sudibia, earlier told the Post that the LNG prices, which will depend heavily on oil price developments, will be slightly higher than the current price level of $2.93 per million British thermal units (BTU). One ton of LNG is equivalent to 51.87 million BTU.
Abda'oe said that Korea currently imports 4.3 million tons of LNG per year under a 20 year contract (since 1986) and another 1.3 million tons a year under a short term agreement.
"In 1998, Korea's import of LNG from Indonesia will reach 7.8 million tons a year," he said, adding that the exports will be supplied by Pertamina's LNG plant in Bontang, East Kalimantan.
"Our sixth LNG plant in Bontang, which started operation early this year, will be able to meet the Korean demand," Suyitno said.
The sixth plant, called Train-F, is designed with a production capacity of 2.3 million tons a year.
Pertamina thus far produces some 26 million tons of LNG per year from its plants in Arun, Aceh, and in Bontang. Around 18.3 million tons are now exported to Japan and 1.7 million tons to Taiwan yearly.
When asked about South Korea's request for additional deliveries of crude oil, Minister Sudjana said that Indonesia cannot increase its oil exports to Korea from the current level of 100,000 barrels per day due to increasing demand on its own domestic market. (fhp)