Eric Watkins
Senior Correspondent
LOS ANGELES, Nov. 9 -- Indonesia officials and Japanese buyers have agreed on a pricing formula for the proposed extension of an LNG supply contract of 6 million tonnes/year that expires in 2010.
"The Japanese buyers are also interested in extending the contract of another six million metric tons/year from Bontang," said Upstream Oil and Gas Regulatory Agency (BP Migas) Chairman Kardaya Warnika. "We have not made any decisions yet on this request. The gas resources in the area are finite."
Japan, Indonesia's largest LNG purchaser, has a contract for 12 million tonnes/year of the fuel from Bontang, East Kalimantan. Buyers in Japan had requested lower prices for the contract extension. "We are asking for a suitable price, considering that oil prices have stayed above $40/bbl," said Eddy Purwanto, BP Migas deputy of marketing and finance.
In October, Indonesia said it was forced to reduce LNG shipments for 2006 by 10% due to lower production from aging gas fields in East Kalimantan and Nanggroe Aceh Darussalam, where the Arun plant is located (OGJ Online, Oct. 27, 2005).
Buyers in South Korea, Taiwan, and Japan agreed to cut their imports from the Bontang plant by 30 cargoes—equivalent to 1.8 million tonnes of LNG—down from the 370 shipments that had been ordered, BP Migas said Oct. 21.
The agency is also trying to drop nine shipments of 75 cargoes contracted from Arun, which has a declining supply from fields operated by ExxonMobil Oil Indonesia.
Contact Eric Watkins at [email protected].