Bontang to send two cargoes of LNG to Fujian

PT Badak NGL, the operator of the Bontang LNG plant in East Kalimantan, said it has to send two more cargoes of LNG to China?s province of Fujian as part of the swap agreement between the LNG plant and the Tangguh LNG plant in West Papua.

The shipment of the first cargo is scheduled to be carried out on July 24, while the second cargo will be delivered sometime in August the soonest, Eddy Purwanto, the Operation and Marketing Deputy at oil and gas upstream authority BPMIGAS said on Wednesday.

Under the swap deal with Tangguh, Badak has to send five cargoes of LNG to overseas LNG buyers that have signed purchase agreement with BP-led consortium, which is the operator of Tangguh. Badak has sent two cargoes to Fujian and another one to Gwang Yang, South Korea. The swap deal was signed before BP consortium recently completed the construction of the first unit of the Tangguh LNG plant.

The swap agreement also helps the Bontang LNG plant cope with decline in demand from its traditional buyers in Japan and South Korea. The Japanese and South Korean buyers announced early this year that they would reduce orders for LNG from Bontang, citing economic slowdown.

Badak?s Plant Coordinator Suyatmo Ahmad said to cut its LNG output surplus, the Bontang plant is also considering sending LNG to state owned fertilizer firm PT Pupuk Iskandar Muda in Nangroe Aceh Darussalam and produce more liquefied petroleum gas (LPG).(bernard)