Govt decides not to extend MCGC?s contract with Bontang

By Febry Silaban

The government has rejected the proposal to extend the contract between Japanese firm Medium City Gas Co. (MCGC) and the Bontang LNG plant in East Kalimantan, which expires in December 2015.

?The government has decided not to extend the MCGC?s contract. The LNG (that is supposed to be delivered to the firm) will be sold on the spot market,? VP for LNG, Gas & Power at Gas Directorate of Pertamina Didik Sasongko Widi told Petromindo.com.

According to Didik, the Bontang LNG will be prioritized for domestic consumers.

In the past July, a source told Petromindo.com that MCGC requested an extension of the contract until the end of 2016 and Pertamina passed the request to the government for approval.

Under the existing contract, MCGC has to absorb 0.4 million ton per annum of LNG from Bontang plant. But the firm will not take all the contract volume. As much as 0.3 million tons per annum, equal to two or four cargoes of LNG, will be carried over to 2016, according to the source.

Editing by Johannes Simbolon