Indonesia Eyes Iran LPG, Condensates Deal but Crude Unlikely

Reuters

JAKARTA, March 7 (Reuters) - Indonesia's OPEC governor said on Monday a deal was imminent for importing Iranian condensate and liquefied petroleum gas, but not for crude oil.

A delegation of Indonesian oil officials will travel to Iran later this week to negotiate a number of energy deals and there had been hopes of finalising a short-term agreement for 120,000 barrels per day (bpd) of Iranian crude for a refinery in Central Java.

Indonesia's OPEC governor Widhyawan Prawiraatmadja said a crude import deal with Iran was unlikely for now because Southeast Asia's largest economy needed sweet crude for its refineries, not Iran's sour oil grades.

"We have limited demand for crude," he told reporters, adding Indonesia imports around 400,000 bpd of crude, of which 125,000 bpd was sour crude from Saudi Arabia.

Before Indonesia can seal the import deal for Iranian LPG and condensates, the government needed to work out how to transfer funds to Iran, Prawiraatmadja said.

He declined to provide details on the expected agreements.

"Clearly, Indonesia needs several things and I think its biggest need is LPG. Iran has an LPG surplus and if they can give us a better LPG price, we should automatically buy from Iran," Prawiraatmadja said.

President Joko Widodo, who met with Iran's foreign minister on the sidelines of a Jakarta conference, said he asked Indonesia's bank regulator to work with Iran to resume banking relations after the lifting of economic sanctions.

(Additional reporting by Gayatri Suroyo; Writing by Randy Fabi; Editing by Christian Schmollinger and Mark Potter)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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