Indonesia needs three more LNG cargoes to cover Arun?s obligation

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Indonesia still needed three more cargoes of LNG to cover the supply obligation of PT Arun NGL Co. and 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, we must buy three more cargoes to meet commitment to East Asian buyers, but to do so, we must have green light from the ministry of finance,? Purnomo said on Friday on the sidelines of the Stakeholders Meeting between oil and gas companies and President Megawati Soekanoputri at the Bogor palace.

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 plants.

Purnomo said gas supply from ExxonMobil?s gas fields to fertilizer firm PT Pupuk Iskandar Muda (PIM) now stood at around 75 MMCFD, which is only enough to feed one of the two plants owned by PIM. Another 110 MMCFD is needed to feed another plant owned by PIM and the plant owned by another fertilizer firm PT ASEAN Aceh Fertilizers (AAF) and fuel gas-fired power plant in Aceh.

Indonesian upstream oil and gas authority BP Migas has 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 technical problems in getting gas supply.

Arun NGL has targeted to export 110 LNG cargoes this year. (Alex/Godang)