Indonesia may still have to look for overseas LNG cargoes

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Indonesia might still have to look for additional overseas LNG cargoes to enable ExxonMobil-operated Aceh gas fields to add supply to Aceh fertilizer makers and gas-fired power plant.

“In order to reduce ExxonMobil gas supply to Arun Natural Gas Liquefaction (NGL) plant, we must buy spot overseas cargo(es) to meet commitment to East Asian buyers, but to do so, we must have green light from the ministry of finance,” said Purnomo. He did not say the number of LNG cargoes Indonesia is looking for.

Purnomo said Ministry of Finance’s approval was necessary, as government would have to subsidize the difference between spot cargo price and lower natural gas price sold to fertilizer plant.

Purnomo said gas supply to Aceh fertilizer maker PT Pupuk Iskandar Muda (PIM) now stood at around 75 MMCFD, and another 100 MMCFD is badly needed to feed the plant and to fuel gas-fired power plant in Aceh.

Indonesian upstream oil and gas authority BP Migas had just secured one LNG cargo from Oman to be shipped to South Korean gas distribution company to enable ExxonMobil to supply natural gas to PIM.

Gas supplies from ExxonMobil’s Aceh gas fields are on the declining mode due to reserves depletion. The condition is even worse as in December-January, contractual obligation to East Asian Buyers are usually higher due to winter season.

Another Indonesian LNG center, Badak NGL in Bontang, East Kalimantan presently could not produce extra LNG cargoes as the plant itself is also struggling with gas supply shortage.

Arun NGL is targeted to export 110 LNG cargoes this year. (godang)