Govt guarantees gas export contracts with overseas buyers

Minister of Energy and Mineral Resources Purnomo Yusgiantoro pledged that the government would guarantee the supply of liquefied natural gas (LNG) from the Tangguh gas field to overseas buyers according to existing contracts, Investor Daily reported on Friday.

The minister made it clear on Thursday that the LNG supply to overseas buyers from the Tangguh field would be continued even if the production sharing contract signed with the operator of the gas field would expire ahead of their export contracts.

He acknowledges that there is a growing concern from several overseas buyers that the LNG supply from the gas field will be stopped if the production sharing contract between the government of Indonesia and the gas field's operator BP Indonesia is not extended.

The export contracts signed with several overseas buyers such as Posko of South Korea, Sempra of the U.S. and Fujian of China will expire in 2027, while the contract awarded to BP Indonesia to operate the gas field will end in 2017.

"Even if the government does not extend BP Indonesia's contract, the gas supply to these overseas buyers will be continued," Purnomo said. He added that the issue related to the extension of the contract with BP Indonesia is a different case.

According to him, the extension of a contract with any operator should pass through existing procedures. "BP Indonesia will be given the chance to extend its contract. But the government will certainly ask for a better term and condition," he said. (*)