LNG exports from Arun may drop by 70%

Exports of liquefied natural gas (LNG) from PT Arun NGL Co is expected to drop by 70 percent this year to 6.2 million tons from 23.5 million tons last year, Bisnis Indonesia reported on Tuesday.

Arun NGL spokesman Irwandar said Arun had shipped a total of eight cargo vessels of LNG worth US$88 million since its resumption of operation in August following a four-month stoppage of operation due to security concerns.

Irwandar explained that the company had actually planned to ship a total of 116 cargo vessels of LNG or 23.5 million tons of LNG to Japan and South Korea this year. However, because of the stoppage of operation, Arun failed to ship a total of 66 cargo vessels.

Currently, Arun's LNG plant is operating normally, and ready to supply more LNG to its buyers. The last shipment was carried out by Eciho Maru cargo vessel with capacity of 120,000 metric tons of LNG through Lhokseumawe port on Oct. 14.

"We consider our LNG is competitive and therefore, buyers continue to buy LNG from Aceh," Irwandar said.

He added that 70 percent of Japan's LNG demand was met by LNG from Indonesia.

Japan and South Korea, Indonesia's two traditional buyer countries, had been expanding its supplies following the stoppage of Arun LNG plant to reduce their dependency on Indonesia.

Companies using LNG from Indonesia include Chubu Electric Power, Kansai Elektric Power, Kyushu Elektric Power, Osaka Gas, Tohoku Electric Power, Kita Kwiusu, and Tokyo Electric Power - all from Japan.

Meanwhile, Korean buyers include Korean Gas Coperation at Peyong Taek. (*)