ExxonMobil can resume operation by the end of May: Pertamina

ExxonMobil can resume the operation of its gas fields in Arun, Aceh by the end of May, according to a study made by a special team comprising of representatives from Pertamina, ExxonMobil and the military.

"Based on the team's assessment, we are optimistic that ExxonMobil can resume its operation by the end of this month (May)," Pertamina's director for production sharing contract management, Iin Arifin Takhyan was quoted as saying by Bisnis Indonesia on Thursday.

He said that the security situation near the American oil and gas giant's operations in Arun had significantly improved lately and that Pertamina would try its best to operate the plant before the end of this month in aid to prevent further losses to the state.

ExxonMobil, which supplies natural gas to Arun LNG Plant and several other companies in the province, has stopped its operations since March 9 due to security concerns.

The closure has caused Indonesia financial losses of about US$100 million due to its failure to meet LNG exports to Japan and South Korea.

Meanwhile, Platt's Commodity News reported that Japan's power company Tepco had expressed its commitment to continue to import LNG from Arun for the July delivery.

But the company warned that it could change its mind and instead buy from other LNG producers, if the Arun LNG plant still could not resume its operation. "A number of LNG producers have approached us to sell their LNG. But we have yet decide until we receive a clear indication from Arun," the company said.

Pertamina had assigned PT Badak Natural Gas Liquefaction in Bontang to meet its export commitment to Tepco for April and May delivery but the Badak plant was only able to provide 8 of the 11 cargoes requested. To cover the shortage, Tepco bought three cargoes of LNG from Malaysia's Petronas.

Arifin said that Pertamina was optimistic that the Arun LNG Plant would be able to meet all the export commitment for July delivery. But if the LNG plant was still unable to resume operation, Pertamina would continue to use the excess production from the Badak plant to meet Tepco's order.

"If Pertamina is still unable to meet all the demand from the Badak plant, we will continue to cooperate with Petronas to meet the export commitment," he said. Pertamina owns both Badak and Arun LNG plants.

Unlike Tepco, Arun's other main buyer Korea Gas Corp (Kogas) said that its LNG stocks for May were still adequate enough to meet the demand from the local buyers.

According to the Korean company, it still holds about 138 million tons of LNG in its storage. (*)