Tohoku agrees to buy two cargoes of LNG from Arun in September

Japanese firm Tohoku Electric has agreed to lift two cargoes of liquefied natural gas (LNG) from PT Arun NGL Co in Aceh in September, according to state oil and gas company Pertamina.

Pertamina's downstream director Muchsin Bahar said Tuesday Arun, which is a subsidiary of Pertamina, would produce four cargoes of LNG next month.

Pertamina was currently negotiating with Korean firm Kogas and Japanese firm Tokyo Electric Power Company, also known as Tepco, to persuade each of them to buy the remaining two LNG cargoes, Muchsin said.

"If Kogas and Tepco refuse to lift the cargoes, the two cargoes will be sold on the spot market to American destinations," Muchsin said.

Arun re-started its LNG production this month after months of stoppage following the suspension by American oil and gas firm ExxonMobil Corp. of its gas operation in Aceh on security concerns.

Pertamina has to persuade Arun's customers buy again from the LNG plant, because most of them had signed contracts to buy LNG from other producers to cover shortfalls from Arun.

The August LNG cargo -- which is the first LNG production made by Arun after the month-long stoppage -- has been lifted by Tepco.