Pertamina, Woodside Sign Preliminary LNG Agreement

Woodside Energy Trading Singapore Pte Ltd has signed a preliminary agreement with Indonesia’s Pertamina (Persero) for the supply of approximately 0.5 to 1.0 million tons of LNG per annum.

The fuel will be supplied from Woodside’s LNG portfolio for a period of 15 to 20 years with deliveries commencing in 2019.

This agreement remains conditional upon the negotiation and execution of a fully termed LNG sales and purchase agreement and obtaining all necessary approvals, including the relevant Woodside and Pertamina board approvals, Woodside said in a statement published Wednesday.

Indonesia’s demand for gas has been increasing in recent years amid declining domestic output. Experts believe the Southeast Asian nation will become net importer of LNG as early as the end of this decade. Last month, Badak LNG said it expects continuous decline in output for next few years due to insufficient supply from depleting gas fields. Badak LNG is one of country’s biggest LNG plants. Output is expected to be 152 LNG cargoes this year, down from 182 cargoes last year.

The projected decline in domestic output has compelled Pertamina to ink various LNG deals in recent months. In March, the Indonesian state owned firm signed a long term 15 year deal with France’s Total.