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Korea seeking extension  of LNG contract with Indonesia


October 16, 2008

Korea seeking extension  of LNG contract with Indonesia

South Korea is looking to extend contracts to import liquefied natural gas from Indonesia beyond the current 2014 and 2017 terms, Reuters quoted Indonesia's energy minister as saying Wednesday.

Korea Gas Corp (KOGAS) has a contract for two million tonnes a year that expires in 2014 and another for one million tonnes a year that ends in 2017.

"We cannot decide right now because there is still plenty of time," Energy Minister Purnomo Yusgiantoro told reporters.

"We are still waiting to assess the extent of gas reserves from offshore East Kalimantan," added the minister, who said he had met a South Korean official on Wednesday for talks.

KOGAS previously also held a contract to import 2.3 million tonnes a year of LNG that expired in 2007 and was not extended.

The outlook for Indonesia's LNG exports has been put in doubt by plans to divert more production to domestic use at a time when its oil and gas output has been under pressure from ageing fields and lags in bringing new production onstream.

Indonesia, the world's second-biggest producer of LNG after Qatar, has failed to meet its contractual commitments to traditional markets such as Japan, South Korea and Taiwan due to a slump in production.

It has far more gas than oil but has limited supplies for its own use due to long-term LNG export commitments, which it is reviewing.

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