Pertamina may buy LPG from PT Badak
Wednesday, March 11 2009 - 03:07 AM WIB
?We are still exploring the possibility of buying between five and six cargoes of LPG from Badak. We need an additional supply of 200,000 tons beginning May, this year,? Pertamina?s commercial and marketing director Hanung Budya said in Jakarta on Tuesday.
PT Badak, one of the country?s major LNG producers, also produces LPG for exports. The company?s production reaches about 750,000 tons a year. At present, the company has suffered an oversupply of LPG because its main buyers, Taiwan and Japan have reduced their imports due to the decline in the demand.
Hanung said that Pertamina wanted to take the advantage of PT Badak?s oversupply to meet the surging demand for LPG.
The demand for LPG has increased since the government launched the kerosene-to-LPG conversion program two years ago. The LPG demand is expected to further increase to 3.2 million tons this year from only one million ton before the program was launched.
About 2 million tons of the total demand would be provided by Pertamina?s refineries. Pertamina has signed a contract to import 800,000 tons through Bermuda-based trader Petredec. The state-owned oil and gas company is still seeking for the suppliers of the remaining 1.4 million tons.
Hanung said that Pertamina would soon open a limited tender to secure LPG supply of between 500,000 tons and one million tons under a long-term contract. (*)