Pertamina urges LNG buyers to be more flexible

Pertamina has asked Indonesia's liquefied natural gas (LNG) buyers to be more flexible in executing their LNG imports contracts with the state owned oil and gas company, Tempo daily reported on Tuesday.

Speaking at a seminar in Seoul, South Korea on Monday, Pertamina's president Baihaki Hakim said that deregulation in the LNG industry in Korea, Taiwan and Japan would provide more leeway for the change in the LNG transactions in the region.

"The situation requires the change in the LNG transactions into a win-win solution," Baihaki was quoted as saying.

At the seminar, Baihaki also asked LNG importers to be more flexible in dealing with the existing contracts with Indonesia. He said that the LNG buyers, for example, should not unilaterally cut their LNG import contracts if there is an interruption in the LNG supply.

ExxonMobil, which supplies natural gas to Arun LNG Plant and several other companies in the province, has stopped its operations since March 9 due to security concerns. This has caused a halt in the Arun LNG production.

The government has said that the ExxonMobil's gas fields would re-operated by the end of this months but many observers doubted if the plan could be realized as the security situation in the troubled province remained fragile.

Pertamina has assigned PT Badak Natural Gas Liquefaction in Bontang to meet its export commitment PT Arun's buyers for April and May delivery but the Badak plant was only able to provide 8 of the 11 cargoes requested. Pertamina was reportedly to have assign Malaysia's Petronas to cover the shortage.(*)