Pertamina to offer Tangguh LNG to Japanese buyers

Feb 04, 2003 01:00 AM

Indonesia's state-owned oil and gas company Pertamina will offer LNG from the Tangguh plant in Papua province to Japanese buyers during a tour of that country to renew various sale and purchase contracts. Pertamina's president Baihaki Hakim said a Pertamina delegation would depart for Japan to negotiate with buyers whose contracts with the Badak LNG plant in Bontang, East Kalimantan province, are to expire in a couple of years.
During the negotiations to renew the contracts, Baihaki said Pertamina would seek to persuade buyers to switch some orders to the Tangguh plant. "Thus far, Tangguh has only got the Fujian order. This is not enough yet to make it economic. At least another 1.5 mm tpy (of LNG from Tangguh) can be offered to Japan," Baihaki was quoted as saying.

Indonesia now has two LNG plants located in Aceh and East Kalimantan. The Arun plant in Aceh is owned by a consortium led by American ExxonMobil, while the Bontang plant in East Kalimantan is owned by a consortium headed by French firm TotalFinaElf and America's Unocal.
The Tangguh LNG plant, which is planned for the Bird's Head area of Papua, will be developed by a consortium led by Anglo-American firm BP. Last year, the BP secured a deal to supply the Chinese province of Fujian with 2.6 mm tpy, but the project needs more orders to be economically feasible. the BP plans to build two trains with a combined capacity of 7 mm tpy as part of the first phase.

Baihaki said Pertamina's move to offer the Tangguh LNG to Japanese buyers was in line with the government's commitment to the development of the Tangguh plant. Many LNG players are unhappy that Pertamina is still playing a leading role in marketing the country's LNG, citing that under the new oil and gas law, the state firm has lost its monopoly over the country's oil and gas industry and should be placed on a par with the other contractors in the industry.
Furthermore, they see a possible conflict of interest given that Pertamina also plans to build its own LNG plantin Donggi, Sulawesi. But, Baihaki said BP Migas had authorized Pertamina, which handled the marketing of Indonesian LNG prior to the 2001 Oil and Gas Law, to continue marketing the LNG to Japan at the request of the Japanese buyers.

Source: Xinhua
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