Indonesia to reschedule LNG export to South Korea

Indonesian will reschedule the shipment of a cargo of liquefied natural gas (LNG) from Arun LNG plant in Aceh to South Korea to meet the gas needs of three fertilizer plants in the province, Koran Tempo reported on Monday.

Kardaya Warnika, the head of BP Migas, the government's agency in charge of oil and gas exploration and production, said in Jakarta late last week that South Korea had agreed for a delay in the LNG shipment for May delivery.

"But it has not been decided yet how long the delay of the LNG shipment will be made," he was quoted as saying.

State owned oil and gas company Pertamina has persuaded its LNG buyers to reschedule their LNG imports from Indonesia to allow it to meet the gas needs of fertilizer producers PT Pupuk Iskandar Muda (PIM) I, PIM II and Asean Aceh Fertilizer (AAF) plants in the province.

The three fertilizer plants' gas needs reach equivalent to 12 cargos of LNG a year, while ExxonMobil Indonesia, the gas producer, is only able to supply three cargoes, because the remaining gas production is only enough to meet the export commitment of the Arun LNG plant.

Pertamina had earlier reported to import a cargo of LNG to meet the May export commitment to its overseas buyers in order to be able to provide enough gas supply to the fertilizer producers. But the government has financial problem to finance the export.

Vice President Jusuf Kalla said last week that the government would need to provide extra funds of at least Rp 500 billion to meet the gas needs of the three fertilizer plants which buy its gas from ExxonMobil at subsidized prices.

Meanwhile PIM president director Hidayat Nyak Man said that PIM was ready to buy the gas at market price of between US$3 and US$4 per mmBtu if the company was allowed to export its fertilizer production. (*)