SKK Migas struggling to find buyers for Bontangs LNG

Friday,November14,201405:45PMGMT+7
ByFebrySilaban&GodangSitompul
UpstreamauthoritySKKMigasisseekingbuyersforfourcargoesofLNGfromtheBadakLNGplantinBontang,
EastKalimantan,whichremainunabsorbedbythemarketin2014,accordingtoindustrialsource.
ThefourLNGcargoesconsistoftwocargoesdeliverablethismonthandtwoothersdeliverableinDecember,
thesourcetoldPetromindo.com.
LastSeptember,ActingChairmanofupstreamauthoritySKKMigasJ.Widjonarkosaidthatthegovernmentwas
offeringtothespotmarketoverseasatotalof11cargoesofLNGwhichhadbeenproducedorwillbeproduced
bytheBontangplantuntiltheendofthisyear.
ThesourceexplainedthatthreecargoeswhichhadbeenavailablesinceJuneandJulyhavebeensoldtoTokyo
Gas.FourcargoesavailablesinceAugustandOctoberhavenotyetfoundbuyersandhavethusbeencarried
overto2015.Thosecargoeswillbeofferedtoexistingbuyersnextyear.Besides,therearefourcargoes
availableinNovemberDecemberwhichhaveyettofindbuyers.
"Iftheeightcargoesarestillunabsorbeduntilthemiddleofnextyear,theywillbesoldtothespotmarket.
Currently,theeightcargoesarestillstoredinthereservoir.TheunsoldLNGhasresultedinhighinventorylevels
attheBontangLNGplant,thesourceexplained.
Toovercomethisproblem,thesourceadded,suppliersofgastotheLNGplanthasbeenaskedtocurtailtheir
gasproduction.CurtailmentishappeningtodayintheMahakamblock,thelargestgassuppliertotheLNGplant,
operatedbyFrenchfirmTotalEPIndonesie.GasproductionfromMahakam,whichnormallyreach1.7bcfd,has
beencurtailedby577mmscfd.
"Pertamina(stateownedoilandgasfirm),whichhasbeendesignatedasthesellerofthestate'sgasshare,also
hasauctiontheLNGonthespotmarketthreetimes,butfailed(tofindbuyers)becausethepriceisunderOE
(ownerestimate),"thesourcesaid.
ThesourcesaidPertaminaisseekingtosellfourcargoesfromBontangtoafirmintheAfricancountryof
Senegal.Thefirmisseekingpermissionfromthegovernmenttodoso.
OtherproblemwhichcausesexcessLNGproductioninBontangplantisthatstateownedelectricityfirmPT
PerusahaanListrikNegara(PLN),whichbuysBontangLNGthroughNusantaraRegas,theoperatorofFSRU
WestJava,hasyettodecideonthenumberofcagoesitwillabsorbin2015,despitethatthegovernmenthas
allocated22cargoesforthecompany.
EditingbyJohannesSimbolon