Indonesia wants to extend LNG deals with Japan: Report

The Indonesian government has begun sounding out Japanese companies about the idea of extending its export contracts for liquefied natural gas, the Nihon Keizai Shimbun reported in its Monday morning edition.

Japan is Indonesia's largest LNG customer. But gas fields are being developed in other nations, so the power has shifted into the hands of buyers, which in this case are the Japanese firms. Since the Japanese companies would like to diversify their procurement sources, Indonesia will likely offer more favorable conditions in the contract extensions, the report said.

In October, executives from Indonesian state-owned oil and gas company Pertamina visited Japan to talk with six Japanese customers, including Chubu Electric Power Co., Kansai Electric Power Co. and Kyushu Electric Power Co. These firms have LNG import contracts with Indonesia that were signed 20-30 years ago and will expire between the end of 2010 and the spring of 2011. The six together import 12 million tons of LNG from Indonesia a year, accounting for 40% of that country's total production and 20% of Japan's total LNG imports.(*)