Cosmo Oil denies it will terminate LPG contract

Japanese company Cosmo Oil Co. has denied a press report that it would cut its contract to purchase liquefied petroleum gas (LPG) from Indonesia, saying that decision on whether or not the company will extend the contract will be made at the end of next year or early 2005, Kompas reported from Tokyo on Monday.

"We have not decided whether or not we will cut the contract but there is a possibility that we will continue the existing contract," Cosmo's executive Tatsuya Yano said, when asked to confirm a press report saying that the company would terminate its LPG contract from Indonesia in the middle of this year due to the high price of the Indonesian LPG.

Yano acknowledged that the price of the Indonesian LPG was relatively higher than those from other suppliers because it's of better quality. But he said the price would remain an important factor in determining whether or not the company would continue the contract.

Indonesia has to compete with a number of new gas suppliers in Japan including Australia and the Middle East which have offered more attractive packages to lure Japanese buyers. (*)