Badak NGL overshoots LNG sales target

Badak NGL overshoots LNG sales target

The charging process of Liquified Natural Gas (LNG) Plant 26 in the area of Badak, Bontang, East Kalimantan. (ANTARA/Rivan Awal Lingga)

This is a time to buy LNG."
Jakarta (ANTARA News) - PT Badak Natural Gas Liquefaction (Badak NGL) in Bontang, East Kalimantan, overshot its liquefied natural gas (LNG) sales target amid slump that hits the oil and gas market in 2015.

The company, which is owned by state oil and gas company PT Pertamina, recorded sales at 189 standard cargo (10.6 million metric tons) exceeding its sales target of 170 cargoes that year, President Director of Badak NGL, Salis S. Aprillian, said here on Wednesday.

This year the company hopes to sell only 147 cargoes (8.3 million metric tons) or smaller than last year, Salis said.

The decline is predicted with shrinking supply of gas to feed the LNG plant.

In a bid to achieve the target, the company has set aside US$200 million (Rp2.76 trillion) for capital spending and operating cost this year.

The fund would be needed to modify the mill (interconnecting module 1&2), DCS retrofit, and lean gas project.

"We will have to carry out maintenance of a train, but we have a back up train that the operation would be normal with four trains," Salis said.

In addition, Badak NGL wilol prepare a number of scenarios to be able to carry on operation within the framework of Second Life Cycle of Badak NGL, he said.

The scenario includes the joining of new producer ENI Jangkrik which has lean gas and possibility of an increase in the production of the Mahakam gas block after its take over by Pertamina.

In a bid to maintain or improve performance amid falling price of oil and gas,Badak NGL would take step for cost efficiency without affecting the productivity of the plant, Salis said.

Efficiency is expected through renegotiation of insurance of the plant, in-house maintenance, in-house dry docking for tugboat, renegotiation of procurement, in-house training, and organizational restructuring, he said.

National gas observer Harry Karyuliarto said with the crude oil price fall in the world market, and over supply in the Asia Pacific region, demand for LNG declined and its price would also shrink under the buyers market.

"This is a time to buy LNG. Unfortunately, the country could not take advantage of the opportunity with inadequate infrastructure," Harry said.

PT Badak NGL is the countrys largest LNG producer and one of the largest in the world. The company was established in November 1974 by Pertamina, Huffco Inc, and Japan Indonesia LNG Company (JILCO).

Currently the shareholder of Badak NGL are Pertamina holding the majority share of 55 percent, Vico Indonesia 20 percent, Total E&P Indonesie 10 percent and JILCO 15 percent.