World's largest supplier of LNG finds itself in a pickle....
The Bontang LNG plant in East Kalimantan, Indonesia will take over from the Arun LNG plant in Aceh to supply liquefied natural gas (LNG) to South Korea under a long-term contract as production from the Arun plant has continued to decline.
The head of the Oil and Gas Executive Board (BP Migas), Rachmat Sudibyo, said LNG production from the Arun plant has dropped sharply over the past year.
Four of the production units of the Arun plant will cease to operate next year because of dwindling supply of natural gas from ExxonMobil, which operates the gas field in Aceh.
Therefore, the Indonesian government has to rely on the Bontang plant to meet the contract with the Korean buyers. Rachmat said LNG, which is still produced in Arun, will be used to feed urea fertilizer factories in Aceh.
Indonesia, the world's largest supplier of LNG, has been forced to import the product to feed its urea fertilizer plants.