Pertamina mulls shifting Korean LNG supply contract from Arun to Bontang

State oil and gas firm Pertamina said on Monday that it was considering to shift some of LNG supply contract from Aceh?s Arun NGL to Bontang in East Kalimantan to make way for fertilizer firm expansion plan in Aceh.

?ExxonMobil?s gas reserve in Aceh is declining and gas supply to fertilizer firm PT Pupuk Iskandar Muda phase II would not be sufficient unless some of LNG supply contract from Arun are shifted to Bontang,? said Muchsin Bahar, Pertamina?s downstream director on a press conference Monday.

ExxonMobil supplies the entire gas requirement for Arun natural gas liquefaction (NGL) plant and to Aceh?s fertilizer firms and paper mill.

He said Pertamina was planning to shift the South Korea?s Kogas supply contract from Arun to Bontang in East Kalimantan.

?The shift would also mean we can go on with the development of Bontang Train I, which so far has not been able to secure buyers? commitment,? said Muchsin.

Muchsin said that he realized such a move would draw objection from ExxonMobil as gas price sold to domestic firms is set at lower price than gas sold for export. However, Muchsin said according to the contract, Pertamina was allowed to do that.

Pertamina and East Kalimantan gas producers has been trying to secure market for Train I LNG plant expansion, but so far they failed to attract buyer.(alex/godang)