Indonesia to submit LNG proposal to Japan?s Western buyers Monday
Saturday, August 16 2003 - 07:17 AM WIB
?A Pertamina-led team will submit the proposal in which Indonesia will offer to sell the LNG to Western Buyers with one contract, dual sources system; and also with greater flexibility and more favorable terms and conditions compared to previous contract,? Djoko Harsono, LNG marketing division head of Indonesian upstream oil and gas authority BP Migas told Petromindo.Com late Friday. BP Migas assigns state oil and gas company Pertamina to market Indonesian LNG to Japan.
Djoko said among the incentive the proposal would offer was greater discount for greater volume.
He added that negotiation would commence in mid-September this year. ?Negotiation could take years to complete, but we are hoping to be able to write down some basic agreement by the end of this year,? he said.
Western Buyers group are traditionally referred to as Kansai Electric Power Company, Kyushu Electric Power Company, Chubu Electric Power Company, Osaka Gas, Toho Gas Company, and Nippon Steel. The group?s current contract with Arun and Bontang LNG would come to end by 2010, and Indonesia is desperately contract extension. Indonesia had been facing stiffer competition from traditional and new LNG suppliers.
Indonesia had been trying hard to lure Japanese buyers to buy Indonesian LNg by offering single contract, dual sources system, in which LNG would be supplied both from Bontang LNG plant and from BP-operated Tangguh LNG plant, which is scheduled to commence production in 2007. Indonesia had also reportedly offering greater contract flexibility and lower price.
Indonesia is thus far the largest LNG producer LNG plants; shipping more than 23 million tons of LNG a year to power plants and other customers in Japan, South Korea and Taiwan. (alex)