Pertamina signs $120m deal to buy LPG from Bontang

State-owned oil, gas firm PT Pertamina will buy up to 240,000 metric tons of liquefied petroleum gas (LPG) from East Kalimantan LNG producer PT Badak NGL, also known as Bontang LNG, under a US$120 million deal signed in Jakarta on Tuesday, Kontan reported on Wednesday.

The deal was signed by Pertamina as buyer and Total E&P Indonesie, a company appointed by the government as seller of the LPG produced by the Bontang LNG plant, together with Inpex, the main supplier of gas for the LNG plant.

Under the agreement, Pertamina would buy up to 240,000 metric tons of LPG from the Bontang plant for the delivery period of between July and December this year, Pertamina?s spokesman Basuki Trikora Putra said.

He said that Pertamina also intended to buy 160,000 metric tons of LPG that had been allocated by the Bontang plant for export market. ?Pertamina is still negotiating the purchase of the remaining 160,000 tons,? he added.

Pertamina had earlier bought 42,000 tons of LPG from the Bontang plant to meet the surge in the LPG demand as the result of the expansion of the government?s kerosene-to-LPG conversion program for households.

Since January, this year, Pertamina has also imported about 1.15 million tons of LPG to support the government?s kerosene-to-LPG conversion program, as the local LPG production is far from enough to meet the demand. (*)