Indonesia hopes to purchase around one million tonnes per year (tpy) of LNG from Qatar and Oman for the 2007-2010 period to meet its export commitments to Japan’s Tohoku Electric, energy minister Purnomo Yusgiantoro said.

“President Susilo Bambang Yudhoyono has held talks with the Qatari government during his recent visit to the Middle East,” Purnomo said.
If Indonesia succeeds in procuring the supplies from Qatar and Oman, it would be able to divert gas production from the ageing Arun field in North Sumatra to local fertiliser company Pupuk Iskandar Muda.
The Arun LNG plant which is 55 per cent owned and operated by state-owned oil firm Pertamina has a contract to supply about 830,000 tpy to Tohoku Electric.
“We have not officially heard from Pertamina since January when they told us about their supply cut for 2006,” a Tohoku Electric source said. “However, we have heard about their attempt to procure LNG from other countries to supply our contract volume,” the source added.
Pertamina has informed Tohoku Electric in January that it would be getting one to two cargoes less from Arun this year than the contracted volume. Each cargo is around 60,000 tonnes.
The supply reduction could be worse from next year, although so far there has been no official word from Pertamina, the Tohoku Electric source said.
“We are seeking other sources of LNG because of growing supply concerns from Indonesia,” the source added.
“However, there are few alternative sources of LNG before 2010. Therefore, what we have done is ask our existing suppliers to increase their LNG supply to us. But we have not got good responses yet,” the source said.
Indonesia has been requesting its term LNG customers for the past two years to accept lower LNG deliveries than their contractual volumes due to faster-than-expected reserves decline at its gas fields and the government’s policy of prioritising supplies to domestic users.
Last year, Indonesia’s term LNG customers had agreed to offtake 51 fewer cargoes than the contractual 455.
The Bontang LNG facility in East Kalimantan supplied 334 instead of 376 cargoes, while the Arun plant supplied 70 instead of 79.