Total expresses concern over ?single contract dual sources? scheme
Saturday, June 14 2003 - 05:47 AM WIB
?Total is concerned about the scheme because Japan?s western buyers have long been Bontang?s traditional market,? said Total chairman and CEO Thierry Desmarest in an interview late Friday. Total, with gas production of 2.5 billion cubic feet per day (BCFD), supplies 65 percent of Bontang?s natural gas requirement.
Indonesian upstream oil and gas authority BP Migas, together with Pertamina had offered ?single contract, dual sources? scheme to Japanese LNG importers often referred to as western buyers in a bid to secure 12 million per annum of LNG contract extension after 2010. Under the scheme, Indonesia would supply LNG from Bontang LNG plant and BP Plc-operated Tangguh LNG plant in the easternmost province of Papua. The scheme is expected to offer more supply security and reliability to Japanese buyers, and at the same time gives chance to Tangguh to get supply order it badly needed.
BP Migas chairman Rachmat Soedibjo dismissed Desmares? concern by saying that Indonesia is trying hard to win the LNG deal from western buyers, and therefore is offering more attractive scheme such as single contract dual source system.? It is obvious that Japanese buyers favor single contract dual source system due to concerns on security of supply, we have to accommodate that if we want to win the contract,? he said.
Rachmat said Total need not to worry about sharing Japan?s market with BP?s Tangguh, because BP Migas would allocate ?ideal? proportion for Bontang. He did not elaborate what he meant by ideal.? Besides, Indonesia will keep on looking for new markets such as USA west coast and domestic market in West Java, which Bontang can take part in,? he said.
Bontang currently has production capacity of 21 million tons per year.Unless extended or renewed, Bontang would loose contract of 12 million tons per annum with western buyers in 2010 due to contract expiration. (alex/godang)