Govt won?t extend Badak V, Badak VI LNG contracts

By Febry Silaban

The government has no plans to extend the existing LNG export contracts of Bontang plant in East Kalimantan, mainly the Badak V and Badak VI contracts which expire in 2017, as LNG from the plant will be prioritized for domestic market.

"The assumption is that we want to stop the LNG contracts of the Badak V and Badak VI trains, but before making a final decision, we will first see whether the domestic market could absorb the LNG from both trains," Gas Commercialization Division Head at upstream authority SKK Migas Arief Riyanto told Petromindo.com recently.

"We are currently at a crossroads. We shall wait until one year before the two contracts expire to make a decision,? he added.

At present, Bontang LNG plant has four existing LNG contracts with buyers overseas: the contract with Japanese firm Medium-sized City Gas Company (MCGC) amounting to 0.39 mtpa expiring in December of this year; the Badak VI contract with CPC Taiwan (1. 84 mtpa) due in December 2017; the Badak V contract with Kogas (1.02 mtpa) expiring in December 2017; the contract with Japanese buyers (Chubu Electric Power, Kansai Electric Power Co., Kyushu Electric Power, Nippon Steel, Osaka Gas and Tokyo Gas) amounting 3 mtpa due this year 2015 and 2 mtpa due in 2020.

Editing by Johannes Simbolon