Baihaki denies Japan reducing gas purchase commitment
Thursday, March 23 2000 - 04:00 AM WIB
President of state oil and gas firm Pertamina Baihaki Hakim denied on Wednesday reports that Japan was reducing its commitment to import LNG gas from Indonesia.
"Until now there's no indication that Japan will reduce its LNG purchase from Indonesia. Perhaps it's the mass media which have misinterpreted," Baihaki said.
He said that Japan was not reducing its commitment, but there was one LNG purchase contract between PT Arun and Japan's Tohoku Power Electric Co and Tokyo Electric Power Co., which would end in 2004. The 3.5 million ton per year contract started in 1984.
But Baihaki said that Pertamina has been negotiating a new contract since 1997. He said that the Japanese buyer wanted the gas source to come from Arun, and wanted a shorter period of contract and smaller volume due to the slowing economy in Japan and pressure for power companies to be more competitive.
Baihaki said that the shorter period of contract would be positive for Arun if Indonesia could take advantage of the opening up of the gas market in 2010. (*)