Taiwan, Pertamina to sign LNG deal

JAKARTA (JP): State-owned oil company Pertamina will sign a new 20-year contract with the Chinese Petroleum Corporation of Taiwan for the sale of liquefied natural gas (LNG) worth US$6.8 billion, an executive said yesterday.

"The contract, which will be the second long-term deal with Taiwan, will be signed at the end of next month," Pertamina's director for general affairs, Baharudin, said after a commemoration ceremony for Indonesia's 50th anniversary.

The first contract called for the shipment of 1.3 million tons of LNG per annum for 20 years beginning in 1989. The Taiwan company has also signed a short-term contract with Pertamina for the purchase of 700,00 tons of LNG a year.

Baharudin said the planned contract will require Pertamina to ship 1.9 million tons of LNG per annum for 20 years starting in 1998.

Pertamina will supply the LNG from Train-H, the eighth LNG production train which will be established in 1997 at Bontang, East Kalimantan, with a production capacity of 2.9 million tons a year, he said.

Pertamina currently operates six LNG trains in Bontang and another six in Arun Aceh, for a combined total production capacity of over 25 million tons a year. The company is also preparing the construction of a seventh production train in Bontang with a capacity of 2.3 million tons a year.

"Train-H will be designed to annually produce 2.9 million tons of LNG, of which 1.9 million tons will be shipped to Taiwan and the remaining one million tons to South Korea," he said.

On Aug. 12, Pertamina signed a 20-year contract worth 3.34 billion with the Korean Gas Corp. for the sales of one million tons per year with deliveries beginning in 1998.

Indonesia currently exports 26.3 million tons of LNG a year to Japan, South Korea and Taiwan.

Baharudin said earlier that Indonesia will boost the development of the giant Natuna gas project in Riau to meet the increasing demand for LNG.

"Last week, we signed a confidential agreement with Japanese investors on their commitment to buy more LNG from the Natuna gas project," he said

The Japanese investors include Mitsui Corp., Mitsubishi Corp., Kanematsu Corp., Nissho Iwai Corp., Toyo Menka Corp., Sumitomo Corp. and Itochu Corp., he said. (04)