Pertamina to discontinue condensate supply to TPPI

State-owned oil and gas firm PT Pertamina has decided to discontinue the supply of condensate belonging to the government to a refinery in Tuban, East Java, operated by PT Trans Pacific Petrochemical Indotama (TPPI) once the existing supply agreement expires at the end of May, Investor Daily reported on Friday.

?Pertamina does not extend (the supply) agreement on economics reason,? said Pertamina Media Manager, Adiatma Sarjito. He did not provide details.

TPPI was assigned in October of last year to process the country?s condensate output belonging to the government to allow the company resume the operation of its Tuban refinery which had been suspended since 2011 due to the lack of condensate supply. The condensate supply deal would help TPPI to repay debts including to Pertamia as the former company would obtain a toll fee for processing the condensates that could not be processed at Pertamina?s refineries.

Deputy for Commercial Control at upstream oil and gas authority SKK Migas, Widhyawan Prawiraatmadja was quoted by Investor Daily as saying that if Pertamina has decided not to extend the condensate supply deal with TPPI, it means the condensate will be put on tender.

He added that SKK Migas has proposed to transfer the authority to hold the tender from the regulator to Pertamina, but the government has yet to response to the suggestion.

The paper said that TPPI has been receiving about 20,000 bpd of Senipah condensate from Pertamina. (*)