Two Arun LNG trains to be shut
Two Arun LNG trains to be shut
JAKARTA (JP): State oil and gas company Pertamina and its
American partner Mobil Oil Indonesia will soon close two of their
six liquefied natural gas (LNG) trains in Arun, Aceh, industrial
sources in Singapore said on Friday.
The sources told The Jakarta Post that one train would be
closed on Monday, followed by another around March.
Spokesman for Pertamina's Foreign Contractors Management Body
(BPPKA) Sidick A Nitikusuma confirmed that two of the six trains
would be closed "soon".
Sources said the closure was caused by a decrease in natural
gas supplies to the plant.
They said the gas resources in the Arun field had been
severely depleted while Pertamina and Mobil had canceled the
exploration of new gas in the province due to security problems.
Aceh has been hit by violence for about one and a half years
as the Free-Aceh separatist group intensified campaigns for
independence following the resignation of former president
Soeharto in mid-1998.
Other sources said the closure was related to violence in the
province, but Sidick denied this.
"The closure is related to the decision of Japanese buyers to
cut LNG imports from the plant, not because of security
concerns," Sidick told the Post.
Earlier, Nihon Keizai Shimbun reported that Tohoku Electric
Power Co. and Tokyo Electric Power Co. (Tepco) would cut LNG
imports from Indonesia by 2.5 million metric tons to a combined
one million tons a year, after the current contract expires in
December 2004.
The utilities believe large-volume imports under a long-term
contract would carry risks amid intensifying competition and slow
growth in electricity demand. Production capacity at the Sumatra
gas field is also falling.
Tohoku Electric Co. will reduce imports to about 850,000 tons
from three million tons, while Tepco will cut imports to some
150,000 tons from 500,000 tons.
The new contract the firms are expected to sign with Pertamina
in April will be shortened to between five and 10 years from the
current 21, according to the paper.
Pertamina data says the six trains of Arun LNG plant currently
produce a combined 12.3 million tons of LNG per year. The closure
of the two trains will cut the plant's output by about four tons.
Aside from Japanese buyers, the Arun LNG plant also supplies
LNG to Taiwan and South Korea.
The LNG plant was built several years after Mobil found a gas
reserve of 14 trillion cubic feet and a condensate reserve of 950
million barrels in the Arun field, which is also called the B
Block, in 1971.
Indonesia is the world's largest LNG exporter.
Aside from Arun, Indonesia has another LNG center in Badak,
Bontang, East Kalimantan, which currently has eight LNG trains
with a total output of 21.4 tons per year. (jsk)
JAKARTA (JP): State oil and gas company Pertamina and its
American partner Mobil Oil Indonesia will soon close two of their
six liquefied natural gas (LNG) trains in Arun, Aceh, industrial
sources in Singapore said on Friday.
The sources told The Jakarta Post that one train would be
closed on Monday, followed by another around March.
Spokesman for Pertamina's Foreign Contractors Management Body
(BPPKA) Sidick A Nitikusuma confirmed that two of the six trains
would be closed "soon".
Sources said the closure was caused by a decrease in natural
gas supplies to the plant.
They said the gas resources in the Arun field had been
severely depleted while Pertamina and Mobil had canceled the
exploration of new gas in the province due to security problems.
Aceh has been hit by violence for about one and a half years
as the Free-Aceh separatist group intensified campaigns for
independence following the resignation of former president
Soeharto in mid-1998.
Other sources said the closure was related to violence in the
province, but Sidick denied this.
"The closure is related to the decision of Japanese buyers to
cut LNG imports from the plant, not because of security
concerns," Sidick told the Post.
Earlier, Nihon Keizai Shimbun reported that Tohoku Electric
Power Co. and Tokyo Electric Power Co. (Tepco) would cut LNG
imports from Indonesia by 2.5 million metric tons to a combined
one million tons a year, after the current contract expires in
December 2004.
The utilities believe large-volume imports under a long-term
contract would carry risks amid intensifying competition and slow
growth in electricity demand. Production capacity at the Sumatra
gas field is also falling.
Tohoku Electric Co. will reduce imports to about 850,000 tons
from three million tons, while Tepco will cut imports to some
150,000 tons from 500,000 tons.
The new contract the firms are expected to sign with Pertamina
in April will be shortened to between five and 10 years from the
current 21, according to the paper.
Pertamina data says the six trains of Arun LNG plant currently
produce a combined 12.3 million tons of LNG per year. The closure
of the two trains will cut the plant's output by about four tons.
Aside from Japanese buyers, the Arun LNG plant also supplies
LNG to Taiwan and South Korea.
The LNG plant was built several years after Mobil found a gas
reserve of 14 trillion cubic feet and a condensate reserve of 950
million barrels in the Arun field, which is also called the B
Block, in 1971.
Indonesia is the world's largest LNG exporter.
Aside from Arun, Indonesia has another LNG center in Badak,
Bontang, East Kalimantan, which currently has eight LNG trains
with a total output of 21.4 tons per year. (jsk)