Pertamina asks govt to form LNG marketing body

State oil and gas firm Pertamina has proposed that the government form a special body to handle the overseas marketing of Indonesia?s liquefied natural gas (LNG), thus eliminating uncontrollable competition among the country?s gas producers, Pertamina top leaders said over the weekend as reported by Suara Pembaruan daily.

Pertamina president director Baihaki Hakim said the government deserved authority to control the marketing of Indonesian LNG in foreign countries considering that 70 percent of natural gas output turned out by production sharing contractors (PSC) was owned by the government.

?It would be highly fruitful if the Indonesian government controls the mechanisms of LNG sales,? Baihaki told reporters.

Pertamina upstream director Muchsin Bahar said separately that without the proposed body, PSCs would continue fighting each other for same markets.

?This would make ineffective the overseas marketing of our LNG,? Muchsin said.

The current oil and gas law, Law No. 22/2001, stipulates that the overseas marketing of the country?s LNG can be done by Pertamina or other parties assigned by the Implementing Body (BP-Migas). Some LNG producers had proposed that they be allowed to directly sell their LNG in foreign countries.

The LNG producers said Pertamina should not be given special rights to market in foreign countries LNG produced by PSCs. This aimed to prevent the firm from giving priority to the marketing of its own LNG.

Under existing oil and gas law, Pertamina operates as a limited liability without monopolies. (*)