Indonesian LNG market under threat

Indonesia's liquefied natural gas (LNG) is now under threat following the decision made by a Japanese company recently to cut its LNG imports from the country, according to Ramses O. Hutapea, the chief negotiator for the marketing of LNG at the state owned oil company Pertamina.

Ramses expressed concern over the Japanese company's decision, saying that Indonesia, the pioneer in the sales of LNG to Japan should be honored. He feared that other companies would also take the same move and shift their imports to other producers.

The decision by the Japanese company indicated a warning signal to Indonesia's LNG because it was issued amid the tightening in the competition in the world's LNG market, he said. At least 10 major LNG plants were now under construction and their entry in the market in the next few years could pose a real problem for the future of Indonesia's LNG future, he added.

Tokyo Electric Power Co Inc, one of Indonesian LNG importers from the country announced recently that it planned to cut its LNG imports from Indonesia to 150,000 tons from 500,000 tons a year when the current contract ends in 2004. The company is one of the Indonesian LNG buyers from Japan, the country's single largest LNG importer.(*)