Pertamina to buy LNG from the Middle East

State owned oil and gas company Pertamina plans to import a cargo of liquefied natural gas (LNG) from the Middle East to meet its LNG export commitment for April (this month), Koran Tempo reported on Tuesday.

Ari Sumarno, the commercial director of Pertamina, said in Jakarta on Monday that a negotiation had been held with a LNG producer in the Middle East. “But it did not run smoothly because the price they asked was too high,” he said.

According to him, the sellers asked for a price of US$7 per mmBtu, much higher than the price of the Indonesian LNG, which is sold for only between $5.2 to $5.6 per mmBtu.

He said that Pertamina would need to import at least a cargo of LNG to meet its export commitment because part of the North Aceh-based gas field has been allocated to meet the gas demand of fertilizer plants PT Pupuk Iskandar Muda I and II, and the Asean Aceh Fertilizer (AAF).

At present, most of the gas production from the field is supplied to the Arun LNG plant. The government recently asked the developer of the gas field ExxonMobil Indonesia to give a priority to the three fertilizer companies so that they could continue their production activities.

The three fertilizer producers have temporarily stopped their operations due to the lack of gas supply. (*)