Pertamina mulling short-term contracts for LNG

State oil and gas company Pertamina said on Friday it was considering an option of offering short term contracts to liquefied natural gas (LNG) buyers to remain the market leader in the increasingly competitive LNG market.

Pertamina's director for general affairs Sjahrial Daud told reporters the short-term contracts would give buyers greater ability to cope with the changes in the the market demand.

He said some Indonesian LNG buyers had voiced demands for such contracts.

"We might offer a between five to ten-year sales and purchase contracts," he said.

Currently, Pertamina sells its LNG to South Korea, Japan and Taiwan under long-term contracts of up to 20 years.

Indonesia is currently the largest LNG exporter with annual exports of 28.98 million tons worth US$4,5 billion in 1999, according to Sjahrial. The exports accounted for 31 percent of the world's LNG consumption.

Indonesia's LNG exports to Japan stood at 19.7 million tons and to Korea at 7.2 million tons in 1999. Some regional buyers have however switched to other producing countries, including Malaysia, Qatar, Australia, which reportedly offer more competitive contractual terms (Godang/Epin)