Total cuts gas production from Mahakam due to declining LNG demand

Indonesian unit of French energy giant Total SA said it would cut down gas production from Mahakam giant gas field in East Kalimantan by 5 percent this year due to decreasing LNG demand from its East Asian buyers.

Total E&P Indonesie President Director Elizabeth Proust told reporters on Monday that the company earlier targeted production of 2.6 billion cubic feet per day (BCFD) from Mahakam.

?We cut production from Mahakam due to declining demand from Japan, South Korea and Taiwan,? she said.

Mahakam PSC, in which Total and Japanese oil firm Inpex Corp. share 50 percent interest each, is the main gas supplier to Bontang LNG plant.

Proust said currently Total is trying to sell excess capacity of Bontang LNG production to spot market. Thus far, said Proust. Bontang has clinched deal to sell one spot cargo to India.

Proust also said Bontang will send one cargo of LNG to Fujian, China in April and another one in May in a swap deal with BP-operated Tangguh LNG. Proust said Tangguh will in turn send two cargoes of LNG to Bontang customers in the future. ?There is no price negotiation on Bontang-Tangguh swap. This deal is purely cargoes exchange,? she said. (Bernard)