Pertamina may delay LPG import tender

PT Pertamina said Friday that it would likely delay its plan to import more liquid petroleum gas (LPG) this year as the state company is planning to use LPG production from a reactivate LPG plant in Bontang, East Kalimantan.

?Pertamina has sent a request to upstream oil, gas regulatory body BPMIGAS to buy LPG from Bontang this year. We will delay our plan to open tender for second import until 2010," ,? Pertamina's deputy director for trading and marketing Hanung Budya told reporters Friday.

Hanung in March 2009 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.

But, Hanung said this plan was delayed because Bontang LNG plant, operated by PT Badak NGL, would reactivate its LPG production this June after being halted since 2005.

The LPG unit which has an installed production capacity of 1.1 million tons a year would be able to produce about 600,000 tons a year. From June to the end of December, this year, the actual production was expected to reach between 350,000 tons and 400,000 tons (equal to 4-5 cargoes), Badak NGL?s President Director Agus Haryanto said in April 8, 2009.

Pertamina has signed a 10-year LPG import contract with the Bermuda-based Petredec, starting 2009. Pedretec will supply Pertamina starting with 800,000 MT in 2009, ramping up to 1-1.5MT in the second year.

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. (bernard)