Pertamina reappointed as marketing agent of LNG for Japanese market

State-owned oil and gas company PT Pertamina has been reappointed as the single marketing agent of the country's liquefied natural gas (LNG) for the Japanese market, according to a top official.

"We have appointed Pertamina to become the single marketing agent for the Japanese market. But this has yet to be made in a formal agreement with the related parties," said chairman of upstream oil and gas authority BP Migas Rachmat Sudibjo on Wednesday as quoted by the Media Indonesia daily.

Rachmat claimed that the Japanese sides had approved the appointment of Pertamina as the marketing agent, adding that the Japanese buyers planned to follow it up by issuing a seller appointee agreement to ensure gas supply from Indonesia.

Japan has been Indonesia's largest LNG buyer, puchasing an average of 20-35 million tons of LNG per year. Some of the existing contracts will expire in 2010. BP Migas has been negotiating for new contract. So far, the so-called western buyers in Japan had agreed to a new 12 million tons per annum contract.

Rachmat did not explain why BP Migas appointed Pertamina to become the LNG marketing agent for the Japanese market, but the paper said that BP Migas, which took over the role from Pertamina in 2001 following the introduction of the new oil and gas law has faced difficulties in winning new overseas LNG contracts amid rising competition from other countries. For example, Indonesia failed to win contracts from the Guandong province in China and from Taiwan.

The paper also said that the Japanese buyers were more comfortable in dealing with the more experienced Pertamina.(*)