Transportation costs for Pertamina LNG lowered

Pacific LNG Transport Ltd, a tanker consortium partly owned by PT Humpus and Japanese companies has agreed to cut the transportation costs of Pertamina's Liquefied Natural Gas (LNG) to Japan.

Pertamina spokesman Ramli Djaffar said here the cut in the transportation cost would enable the state oil company to save about US$60 million through the contract period of between 2000 and 2010.

He said that the agreement was reached early this year after 16 months of negotiations beginning in September 1998.

Pacific LNG Transport Ltd, which operates the Dwiputra LNG tanker, is jointly owned by Soeharto son Hutomo Mandala Putra's Humpus Group and a group of Japanese companies.

According to Ramli, Pertmina was pressured in 1994 to award the contract for the transportation of LNG to Japanese buyers despite its opposition due to its high transportation costs. After the downfall of Soeharto in the middle of 1998, the state oil company sought to renegotiate the contract.

Ramli said that under the agreement, the Japanese partners Mitsui OSK Line and Nissho Iwai also agreed to buy Humpus's stake in the consortium. (*)