Indonesia is taking its first 44,000-million-ton LPG cargo from Iran in August under a one-year renewable contract signed recently, based on which state-run Pertamina will take a monthly cargo, a source familiar with the matter said on Tuesday.
Pertamina will normally seek an evenly split cargo of propane and butane, though it will be up to the National Iranian Oil Company, or NIOC, to allocate the parcel split depending on availability and timing. This could include a cargo comprising 33,000 tons of propane and 11,000 tons of butane, or vice versa, the source added, Platts reported.
Indonesia had sought a discount of between $15 per ton and $20 per ton to the Saudi Aramco Contract Prices on a free-on-board basis for the cargoes under the government-to-government contract, the source said.
"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 tons, steady from last year.
