Tohoku flush with LNG offers after Arun stop

Tohoku flush with LNG offers after Arun stop

TOKYO (Dow Jones): Japan's Tohoku Electric Power Co. has received spot liquefied natural gas offers of a total of about 1.2 million metric tons for delivery until June, after the shutdown of the Arun gas field in Indonesia, a company official said on Monday.

"For up until June, we received offers for LNG supply equivalent to 20 tankers," the official said, without naming the sources of the offers. "We are arranging vessel deployment as well as adjusting unloading schedules at our import terminal."

The official said there is still no word from Pertamina, Indonesia's state-owned oil concern, when natural gas production can resume.

Exxon Mobil Corp.'s Indonesian unit, which is the sole natural gas supplier to Indonesia PT Arun NGL's natural gas production, shut down three onshore fields - Arun, Lhoksukon and Pase, March 13 because of rising security fears in Indonesia's troubled Aceh province. The three fields produced a total 1.6 million cubic feet of natural gas a day.

Tohoku Electric, which serves the northern part of Japan's main island, imports 3 million metric tons a year of LNG from Arun on a free-on-board basis under a long term contract with Pertamina. Tohoku's other LNG supply sources, Malaysia and Qatar, each sells slightly over 500,000 tons/year.

Tohoku already purchased one additional LNG cargo of about 60,000 tons from Malaysia for early April delivery in the wake of the Arun halt.

The Tohoku official reiterated that there will be no immediate power supply shortages.

The company has boosted operations of non-gas fired thermal generation. It is shifting to oil-fired generation at some of its usually gas-fired thermal power stations while raising operations at oil-fired thermal stations.