Indonesia to decide on Japan's LNG contract extension in 2007: VP

Indonesia will decide next year on the renewal of a contract to sell liquefied natural gas (LNG) to Japan, depending on Indonesia's domestic demand and output, Vice President Jusuf Kalla said Friday as quoted by agencies.

An 8.4 million tonnes per year (tpy) contract with Japan expires in 2010 and another deal for 3.6 million tpy ends in 2011, equivalent to about two-thirds of Japan's total LNG imports from Indonesia.

"We will decide next year after we make a review on how much we need, say for the next 10 years, and how much we can produce. Then we will see whether we will extend or reduce (the volume) depending on our gas balance," Kalla told reporters.

An Indonesian energy ministry official has earlier said the world's top LNG exporter might decide to halve its shipment to Japan to six million tpy when the contract expires at the end of the decade.

Japan is concerned about maintaining massive imports of Indonesian natural gas in LNG form, after Indonesian officials have said drastic cutbacks could be coming as it wants to use more gas at home.

Both sides have said economic talks and deals will be the focus when President Susilo Bambang Yudhoyono visits Japan next week, and an Indonesian foreign ministry spokesman has said Tokyo wants LNG included in agreements to be signed during the visit.(*)