LOS ANGELES, Feb. 24 -- Japan's Mitsubishi Corp. reported it will import 20,000 b/d of crude oil for the next 6-7 years from Indonesia's state-owned oil and gas company Pertamina as part repayment for a $310 million loan to Pertamina that Mitsubishi and seven other lenders have arranged.
The loan will finance a series of engineering, procurement, and construction contracts for Pertamina's Pagardewa natural gas development project, including installation of gas gathering facilities at West Musi field, West Musi-Pagardewa gas transmission and compression facilities, and gas gathering facilities at Merbau and Pagardewa.
The gas will be sold primarily to Indonesia's state-owned gas transmission company PT PGN under a long-term supply agreement.
Mitsubishi will arrange 70% of the gas project funding through a Japanese entity, with the remaining 30% provided by four commercial banks.
Mitsubishi will import a package of low-sulfur Indonesian crudes, mainly Minas grade, for sale to Japanese utilities and split the revenues with its lending partners.
The Mitsubishi-Pertamina deal will raise Japan's imports of Indonesian crude oil to 160,000 b/d from 140,000 b/d at a time when the supply of low-sulfur crude oil in Japan has become tight following suspension of such imports from China.