Jakarta Post: Govt struggles to find LNG buyers after contracts end

The Upstream Oil and Gas Regulatory Task Force (SKKMigas) is racing against the clock to find buyers for 18 cargoes of Liquefied Natural Gas (LNG) as the existing import contracts for the LNG have expired.

 “We are discussing all options to figure out the best move. We have to do this quickly as it is impossible to stop the production,” SKKMigas acting chief Johannes Widjonarko said.

The 18 cargoes of LNG will come from the production of the Badak LNG plant in Bontang, East Kalimantan, during 2014 to 2015 period. The new deals for the 18 cargoes should be made before the end of the first semester so that a cut in LNG production at the Badak plant can be avoided.

Widjarnoko said in Jakarta on Monday that the task force was considering selling the LNG cargoes to a spot market if the agency failed to secure long-term buyers. 

Finding new LNG buyers, however, won’t be as easy as the LNG supply in the world market has increased in recent years, especially due to a production boom in the United States.  MORE