MOSCOW (MRC) -- Indonesia is taking its first 44,000-mt LPG cargo from Iran in August under a one-year renewable contract signed recently, in which state-run Pertamina will take one monthly cargo, reported Apic-online with reference to a source familiar with the matter.
Pertamina will normally seek an evenly split cargo of propane and butane, though it will be up to the National Iranian Oil Co., or NIOC, to allocate the parcel split depending on availability and timing. This could include a cargo comprising 33,000 mt propane and 11,000 mt butane, or vice versa, the source added.
"We are waiting for Iran to allocate the volumes to Pertamina. All the commercial side has been done," the source said. "The first cargo is expected in August."
The source said Pertamina requires new term contracts because its current term import volumes are not sufficient to meet growing demand.
Pertamina's 10-year term supply contract with international trading firm Petredec is also due to expire in 2018. The contract volumes for 2016 are around 1.22 million mt, steady from last year.
The source said Pertamina plans to issue a tender next year ahead of the expiry of the Petredec deal, though the duration of the new contract - which will be opened to as many trading firm as possible - will likely be limited to one to three years. This was in view of the wider supply sources and low prices seen over the past year.
Long-term contracts will likely be restricted to government-to-government agreements, he said.
As MRC wrote previously, in April 2016, it was announced that Indonesia is strengthening its bilateral cooperation with Iran particularly in the oil and gas sector following the recent removal of sanctions on Iran, one of the world’s biggest oil producers. During a bilateral meeting in Bogor, West Java, the two countries agreed to cooperate in the upstream oil and gas sector, and data and technology exchange. The Energy and Mineral Resources Ministry’s oil and gas director general Wiratmaja Puja said Iran offered to supply crude oil, condensate and liquefied petroleum gas (LPG) as well as to develop refineries in Indonesia. In addition, the two countries also agreed to develop human resources as well as conduct research and development together.
Besides, in May 2016, Indonesia’s PT Pertamina (Persoro) and Saudi Aramco let a contract to a subsidiary of Amec Foster Wheeler PLC to provide engineering and project management services for the upgrade and expansion of the 348,000-b/d Cilacap refinery on Java, Indonesia. Amec Foster Wheeler Energy Ltd. will execute the basic engineering design study as well as finalize the process configuration and licensors’ packages for the proposed upgrading project over the next 9 months. The overall expansion, which comes as part of Pertamina’s Refinery Development Master Plan (RDMP) to increase Indonesia’s energy security and ensure the long-term competitiveness of its refineries (OGJ Online, Oct. 7, 2013), will cost an estimated USD4-5 billion, the companies said.
Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
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