Pertamina 'pressurizes' Arun LNG buyer

State oil and gas company Pertamina has "pressurized" traditional consumers for liquefied natural gas (LNG) from Arun, North Aceh, to buy five cargo vessels of Arun LNG, Bisnis Indonesia daily reported on Thursday.

Pertamina president Baihaki Hakim said that based on the contract's take or pay clause, the buyers have to buy LNG from Arun.

"It's true that there was a force majeure situation, but now we are in a transition period. And the direction is that we are heading toward full capacity in Arun. So, we hope they will also buy the products based on the contractual obligations," he said.

He was responding to a statement from one South Korean official who said that the country's LNG stocks would be enough until September.

Nevertheless, Korean Gas Company (Kogas), one of Arun traditional buyers, is slated to hold a due diligence at PT Arun Natural Gas Liquefaction (Arun NGL0 to know its readiness to operate fully.

Besides Kogas, Arun NGL also supplies LNG to a number of power plants in Japan, grouped under the consortium of Western buyers. They include Osaka Gas, Toho, and Tohoku Electric Power Co. (Tepco).

When asked about the planned due diligence by Kogas, Baihaki said that he did not yet know the results. "We are still negotiating with them. What's important is that LNG production from Arun has resumed, that's positive."

Currently, Arun NGL has produced one cargo vessel of LNG, and it would be shipped on August 13.

"It's still one cargo, but we must act very positively in selling our LNG, although Pertamina also sees the reality that in the next one to two months, we cannot operate full capacity." (*)