LNG imports from RI won't be cut: Korean Gas

Korea Gas Corp., the world's biggest liquefied natural gas buyer, said its imports of the fuel from Indonesia will not be cut, in response to earlier news reports that South Korean utilities would have their LNG cargoes reduced next year, The Jakarta Post reported quoting Bloomberg.

Korea Gas has reached an agreement to import 98 cargoes of the fuel from Indonesia in 2005, as scheduled, Hyun Sang Soo, an official at the Seoul-based company's LNG purchasing team, said by telephone. One cargo is about 60,000 metric tons, he said.

Japan's Nihon Keizai newspaper reported earlier that Indonesia will reduce exports of LNG to Japan, South Korea and Taiwan next year because of a decline in production. Shipments to South Korea will be cut by 1 million tons, the paper reported, without saying where it got the information.

"The Nikkei report is wrong," Hyun said. "We've signed an agreement with Indonesia to get next year's contracted volume as promised. There won't be any disruptions to supplies."

Indonesia is negotiating with buyers in Japan, South Korea and Taiwan to cut exports from the world's LNG plant in Bontang, Kalimantan, and from one in Aceh, Sumatra, the country's state oil and gas regulator BPMigas said last month.

LNG is natural gas that has been cooled for transport by ship. Import terminals return the LNG to gas form so that it can be sent through pipelines to customers such as factories, power stations and households.

Indonesia aims to cut 30 to 35 cargoes a year from PT Badak NGL in Bontang because of production problems, said Rachmat Sudibyo, chairman of BPMigas.

The regulator also wants to cut as many as 15 cargoes from PT Arun NGL in Aceh to increase gas supplies to the country's fertilizer industry.(*)