Pertamina to talk with Korean buyers on LNG sales next week

State oil and gas company Pertamina is expecting to soon meet with South Korean gas company Kogas in Jakarta to discuss the purchase of liquefied natural gas (LNG) from the Arun LNG plant in Aceh.

Pertamina?s downstream director Muchsin Bahar recently told Petromindo. Com that officials from Kogas were expected to arrive next week.

During the meeting , Pertamina would try to convince the Kogas officials that PT Arun NGL Co would be able to restart LNG shipment in mid August as the result of the resumption of gas operation by ExxonMobil Oil Indonesia Inc., a unit of American energy giant ExxonMobil Corp.

PT Arun NGL suspended its LNG production and shipment to South Korea and Japan since April following the suspension by ExxonMobil of its gas operation in Lhok Sukon on security problems.

ExxonMobil restarted its gas operation last week.

?We shall tell the South Korean buyers that we guarantee supplies until December this year,? Muchsin said.

Muchsin said Pertamina would first approach the South Korean buyers rather than the Japanese buyers because the former was more ?understanding the situation?.

Kogas earlier said that it would not buy LNG from Arun until October because it had signed to buy the commodity from elsewhere.

?We can?t receive LNG (from Aceh) because South Korea has already made arrangements to replace the LNG supply from Aceh until September,? a Kogas official was quoted saying by Dow Jones Newswire last week.

Meanwhile, director general of oil and gas at the ministry of energy and mineral resources Rachmat Sudibyo said Pertamina would sell Arun?s LNG products on the spot market in case the Korean and Japanese buyers refuse to take the August shipment.

?We are likely to do that if the Japanese and Korean buyers are still reluctant to take the shipment until end of August,? Rachmat said on Friday.

The shipment of the LNG to the spot market would send a positive signal to the LNG buyers that the LNG production at Arun has returned to normal, which is expected to persuade the buyers to resume their LNG purchase from Indonesia.

He said Pertamina had no problem with selling its LNG on the spot market as it had often done so in the past.

?Selling and buying LNG on the sport market is something that we usually do,? Rachmat said.

He noted however that Pertamina should sell the LNG on the spot market at the competitive but still profitable price. (Godang/Bodega)