Indonesia to cut LNG supplies to Japan, Taiwan, and South Korea

Indonesia plans to cut liquefied natural gas (LNG) supplies to Japan, Taiwan and South Korea next year due to natural gas supplies for its LNG plants in Arun, Aceh and Bontang, East Kalimantan.

Rachmat Sudibyo, chairman of oil and gas upstream authority BP Migas, said on Wednesday that supplies from Arun would be lower by between 9 and 15 cargoes from initial commitment next year, while the Bontang plant will cut its exports by between 30 and 35 cargoes from initial commitment.

According to BP Migas financial, economy and marketing director Eddy Purwanto, Arun was initially committed to exporting a total of 76 cargoes to the three countries next year, while Bontang initially planned to export 360 cargoes in the period. Last year, Arun exported 110 cargoes to the countries, while Bontang shipped about 360 cargoes.

One cargo contains 56,000 tons of LNG.

Rachmat said Arun wanted to reduce its export commitment for next year because it would get lower gas supplies from ExxonMobil, the only supplier of natural gas to the LNG plant. ExxonMobil would allocate more natural gas for fertilizer plants in Aceh, which are now facing shortage of gas supplies.

The Bontang plant has planned to cut its export commitment due to anticipated ?troubles? to be faced by the production-sharing contractors now supplying the plant next year, which could lead to a decline in gas output, according to Rachmat.

Rachmat further said that last week, a special team had left for the three countries for talks with buyers about the matter.

They will sit together again later November to agree on the so-called ?annual delivery program?, which specifies the fixed volume to be shipped from Arun and Bontang to buyers in the three countries for next year. (Alex/Godang)