One cargo of Arun LNG sold to Japanese Tepco

State oil and gas company Pertamina has reportedly managed to sell one cargo vessel of liquefied natural gas (LNG) from Arun Natural Gas Liquefaction (NGL) to Tokyo Electric Power Company (Tepco) of Japan through the spot market.

Sources said that the delivery of the sold LNG would be made mid-August, possibly on August 13.

The sources said that the spot price for Arun LNG was quoted lower than Arun NGL's contractual price for its LNG.

The spokesman of Pertamina's Production Sharing Management, Siddick Natakusuma, however could not confirm the sale of this one cargo of LNG to Tepco. Nevertheless, the amount of LNG currently filling Arun NGL's storage had reached about one cargo vessel.

Arun NGL has resumed the operation of one of its LNG liquefaction trains, with natural gas supplies from ExxonMobil Oil Indonesia's gas fields in cluster I and II in North Aceh.

Arun NGL would be able to produce a total of four cargo vessels of LNG this month alone, but Pertamina could not yet find the buyers for the remaining Arun LNG.

Nevertheless, the sources said that the efforts by Pertamina and also the government to sell its Arun LNG through the spot market would face difficulties, as the spot market constitutes only five percent of the world's total LNG market.

If Pertamina could not find the buyers, the LNG would be stored in Arun NGL storage facilities. When the facilities are full of LNG, then Arun NGL would likely stop again its operation until October.

Arun's traditional buyers, Korean Gas Corporation (Kogas), has shifted their LNG purchase to other suppliers due to the stoppage of Arun NGL for several months. Kogas will start buying LNG from Arun in October. (*)