Tohoku Electric turns to spot market for June LNG supply: Report

Japanese utility Tohoku Electric Power Co Inc said on Wednesday it was seeking an unspecified number of June spot cargoes of liquefied natural gas (LNG) to replace lost supply from Indonesia's troubled Aceh province, Reuters news agency reported.

For now, Japan's fourth-largest power utility is not thinking of signing new long-term contracts to cover the shortfall, a spokesman said.

He said Indonesian LNG suppliers had been unable to provide a specific timeframe for the restart of the Aceh gas fields in the northern tip of Sumatra island at a meeting held earlier this month.

``They were unable to tell us when they expected to resume production...so we've decided to take specific steps to procure spot LNG cargoes for June,'' the spokesman said.

The meeting was held between Tohoku Electric officials and officials from Indonesia's state oil company Pertamina and Exxon Mobil Corp's Indonesia unit, he said.

The U.S. energy giant was forced to close down its facilities in the Aceh gas fields in March due to security concerns, halting output at the major PT Arun NGL plant.

The Tohoku Electric spokesman said the suppliers had reassured a continued provision of some alternative LNG cargoes from the Bontang Centre from June.

``But it is uncertain whether we will be provided with all the alternative cargoes from Bontang, and even if we are, the volume will not be enough to fully cover our requirements,'' he said.

Tohoku Electric was due to be supplied with a total of eight LNG cargoes from Bontang by the end of May to compensate for volumes that cannot be fulfilled by Arun, he said.

The spokesman could not provide a specific figure for the number of spot supplies it would seek for June.

The company has received on average about five to six LNG cargoes from Indonesian a month, he said.

An industry source in South Korea said state-run Korea Gas Corp (KOGAS) , another major buyer of Indonesian LNG, is close to signing a deal to replace lost volumes.

Separatist rebels in the resource-rich province of Aceh have been fighting for independence for decades. Jakarta has ruled out independence, offering a wide ranging autonomy instead.(*)