A unit of energy trader Vitol has signed a three-year deal to offtake volumes from Indonesia’s Bontang LNG facility in East Kalimantan.
According to a statement by the Geneva-based firm, its unit Vitol Asia submitted the most competitive bid as part of an open tender process held in February 2023 by the “Merakes LNG Sellers”.
This sales and purchase agreement represents the conclusion of that process and the LNG supply to Vitol will start in 2024.
Under the deal, Vitol’s unit will receive 0.55 million tonnes per year of LNG for a period of three years on a free on board (FOB) basis, with a possible one year extension, it said.
Merakes and Bontang LNG
Pertamina’s Bontang LNG plant will liquefy these volumes from feed gas produced from the Merakes field located in Indonesia’s Makassar Strait.
Merakes is part of the East Sepinggan PSC, jointly owned by Italy’s ENI, Neptune Energy, and PT Pertamina Hulu Energi.
Eni and its Norwegian unit Var recently reached a deal to buy UK-based Neptune for $4.9 billion.
Back in April 2021, Eni and it partners started gas production from the Merakes project offshore Indonesia.
Gas supplies from the field will help extend the life of Pertamina’s Bontang LNG facility.
The Bontang LNG plant launched liquefaction operations in the 1970s and has been supplying LNG ever since, primarily to Asian markets.
Vitol’s LNG portfolio on the rise
Mike Muller, head of Vitol Asia, welcomed the signing of this mid-term LNG purchase arrangement.
“These Bontang LNG volumes are highly complementary to our portfolio and further enhance our ability to optimally, safely and reliably supply our customer base across Asia, whilst underscoring Vitol’s strong historical ties with Indonesia,” Muller said.
Last year, Vitol traded 13.7 million tonnes of LNG worldwide as the company’s portfolio responded to increased demand from Europe.
The firm, which entered the LNG market in 2006, reported LNG volumes of 12.9 million tonnes in 2021, 10 million tonnes in 2020, and 10.5 million tonnes in 2019.