Indonesia seeks to delay LNG shipments to S. Korea: Kogas

Indonesia is in talks with South Korea's Korea Gas Corp. to delay by one to two years delivering five-six liquefied natural gas cargoes from Aceh slated for delivery this year, an official at Kogas was quoted by Dow Jones as saying Thursday.

Kogas has two long-term contracts to buy 3.3 million metric tons, or 60 cargoes, a year of LNG from PT Arun natural gas liquefaction plant in Aceh, on the northern tip of Sumatra.

Each cargo is approximately 55,000 metric tons, or 125,000 cubic meters.

"Pertamina is asking to delay the delivery of LNG cargoes because the government wants to divert the natural gas (produced in Aceh and offshore North Sumatra) to local fertilizer plants," the Kogas official said.

PT Arun NGL plans to produce 109 LNG cargoes this year, down from 114 in 2003 and sharply down from a peak of 224 shipments in 1994, Arun plant officials said.

PT Arun NGL is operating four out of six trains because natural gas production has been on the decline, they said, with Arun LNG exports expected to fall steadily to approximately 103-104 in 2005.

By 2006, maybe 2007, the utilization rate of the liquefaction facility will fall to 50%, or three out of six LNG production trains, a plant engineer said.

"One (supply) contract will expire in 2006," he said.(*)