Pertamina demands full authority to market LNG to Japan

State oil and gas company Pertamina said on Friday it was still seeking to secure marketing monopoly to sell Indonesian LNG to Japan market, Pertamina official said.

?Pertamina is still seeking authority as single Indonesian LNG seller to Japan. Pertamina has thirty-year experience in dealing with Japanese buyers,? Pertamina downstream director Harry Purnomo told reporters. ?We want full authority,? he added.

Japan is thus far Indonesia?s largest LNG buyer, absorbing around 60 percent of Indonesian LNG production.

Upstream oil and gas authority BP Migas had actually appointed Pertamina to market Indonesian LNG to Japan, especially in dealing with effort to renew LNG contracts with Japanese buyers, which will due around 2010. However, Pertamina felt uncomfortable with so many parties including BP Migas and officials from Ministry of Energy and Mineral Resources involved in uncoordinated effort to win contract extension or to try to clinch new contract with Japanese buyers.

?So many parties are trying to interfere in marketing effort to Japan market. We want this to change because it would not be effective,? said Harry.

An industry source contacted by Petromindo.Com admitted lack of coordinating in marketing LNG to Japan. ? BP Migas is meddling to much, as if the don?t trust Pertamina. But in the same time there is no good coordination with production sharing contractors (PSCs) with either BP Migas or Pertamina. ?Even within BP Migas, there?s no coordination between officials who are involved in production with those in marketing,? he said.

Another source said the fact that Tangguh LNG also wants to get its piece of share in Japan market made the marketing effort more complicated. ? Tangguh wants to get a share in japan market and had been doing separate marketing effort,? the source said. The source said what Indonesia need now is a single and strong marketing team, which consists of Pertamina, BP Migas and Indonesian LNG producers. ?Otherwise, we will not be able to maintain our dominance in Japan market, or at least the Japanese buyers will be able to dictate their terms,? the source said.

Bontang LNG will be faced with under capacity problem if it doesn?t win contract extension with Japanese buyers. Some 12 million tons per annum of LNG contract will expire by 2010. ?With the emergence of new LNG suppliers all over the world, there will be no guarantee that there will be new market for Bontang after 2010. That?s why Bontang are reluctant if it had to share Japan market with Tangguh,? said the source. Meanwhile, Tangguh, a grass root LNG project is in desperate need for new LNG contracts to fill up its capacity.

Minister of Energy and Mineral Resources had campaigned for unified marketing team called Indonesian Incorporated, where government, BP Migas, Pertamina and LNG producers teamed up as one group, but thus far, many see that the marketing body hasn?t run well. ?Government is seemingly back Tangguh too much,? said one source. ?Within the past few years, Bontang LNG has not won a single new contract.? (alex/godang)