Pertamina wants solid gas sales demand, price

State oil and gas company PT Pertamina is seeking a guarantee that domestic companies interested to buy gas from the Senoro and Matindok fields will maintain long-term order commitments, to help ensure sustainability of demand.

Pertamina's head of LNG business Hari Karyuliarto said last week the domestic firms must present their business plans to be incorporated into proposals for gas purchase.

"There must be a guarantee on their project completion. The buyers must be able to complete their planned facilities to absorb the gas by the first semester of 2013 at the latest," Hari said.

Those facilities would include gas-fueled power plants and fertilizer plants, plus associated receiving terminals and infrastructure.

"The buyers must also provide us with financing certainty for these gas purchases," Hari said.

Pertamina owns 100 percent of the Matindok field, while the Senoro field is equally owned by Pertamina and PT Medco Energi Company.

The two companies had invited Japan's Mitsubishi Corporation to establish PT Donggi-Senoro LNG to process the gas from the two blocks as liquefied natural gas (LNG) for export purposes. But, the project and the plan for exports were put in doubt when the government decided the gas from the two blocks must be sold to domestic buyers.

The decision has led to Japanese Kansai Electric Power Co. Inc terminating an LNG sales agreement.

Now, Pertamina is still in talks with three companies: state power firm PT PLN and two fertilizer producers PT Pupuk Sriwijaya (Pusri) and PT Panca Amara Utama (PAU).

State gas distributor PT PGN, which earlier was in talks with Pertamina, has pulled out from talks, saying the gas price demanded by Pertamina was too high.

Pertamina says the two blocks can only allocate up to 70 mmscfd of gas for domestic buyers. "If there is more than one interested buyer, then the buyers may discuss between them the allocation of the 70 MMSCFD of gas," Hari said.