Pertamina agrees to buy LPG from PSCs to meet growing demand
Friday, July 25 2008 - 01:40 AM WIB
Oil and gas upstream sector regulator BPMIGAS's head of external division Amir Hamzah said on Thursday the agency had facilitated the signing of the contracts between Pertamina and five PSCs.
PetroChina has, for example, signed a contract to sell about 400,000 tons of LPG to Pertamina this year. The Chinese company will supply the fuel from its LPG plant in Jabung, Jambi. This is the second contract signed by PetroChina with Pertamina.
The first contract was signed in February, 2004 under which Pertamina would receive 9,885 tons of LPG until December 2008 from PetroChina?s LPG plant in Arar Salawati, Papua.
ConocoPhillips has also signed a contract to sell 175,000 tons of LPG from its LPG plant in Belanak, Natuna to Pertamina for six months period from July to December, this year.
Meanwhile, Chevron has also agreed to supply 48,000 tons of LPG from its plant in Tanjung Santan, East Kalimantan to Pertamina for this year.
In addition, Medco has also signed a contract to sell 196,020 tons of LPG from its LPG plant in Kaji, South Sumatra to Pertamina for the period of July 2007 to April 2009.
Pertamina has also signed a memorandum of understanding for the procurement of 180,000 tons of LPG a year from Hess?s Ujung Pangkah plant, beginning the first quarter of 2009, and another 216,000 tons a year from JOB Pertamina-Hess?s Merang LPG plant in Jambi.
He said that the agency would further encourage PSCs to sell their LPG in the domestic market to meet the surge in the LPG demand in the country.
With the government?s kerosene-to-LPG conversion program, Pertamina will need between 5 million and 6 million tons of LPG a year to meet the growing demand.
As Pertamina?s LPG production is not enough the meet the demand, it has to import to cover the shortage. This year, the company plans to import about 400,000 tons of LPG.
He also to meet the surge in demand for LPG, the agency is considering the resumption of the Badak LPG plant which has the production capacity of 500,000 and 600,000 tons per year. (Godang)