Indonesia to import LNG to meet rising gas demand at home

Source:Xinhua Published: 2012-6-25 13:18:52

Indonesia's state-run oil and gas firm, Pertamina is planning to import liquefied natural gas (LNG) from Africa and Australia starting 2013 to cope with growing demand in the domestic market, local media reported on Monday.

The company's vice president for commercial and business development, Djohardi Angga Kusumah, said Pertamina would take 1 million ton per annum (mtpa) of LNG from each country.

The total of 2 mtpa of LNG would be delivered to the West Java floating storage and re-gasification unit (FSRU) until other LNG receiving terminals had been built, he added.

The seven LNG terminals are predicted to cost around 270 million US dollars, with the first terminal expected to begin operations in early 2014 and the last in late 2015, he said.

"In an African country, there is around 2.7 mtpa of LNG that has not been sold. However, we will only take 1 mtpa from Australia. We are also negotiating to import 1 mtpa," he said over the weekend.

However, he declined to name the African country or the Australian supplier because the deals were still about to be finalized. He said if the negotiations could be concluded to formal deals, the imports would begin next year for a period of 10 years.

Djohardi affirmed that Pertamina would still import the LNG whether or not the company's plan to set up another FSRU off Central Java could be executed.

"From 2013 to 2016, the imported gas will be used to fulfill domestic demand, but starting in 2017, we will let our allocation be taken by other buyers as I predict we will have supply from domestic gas fields," he said as quoted by the Jakarta Post.

He continued saying that in 2017, the country would receive additional LNG supply from the expansion of the Bontang LNG plant in East Kalimantan and the operation of the third production facility, usually called a train, at the Tangguh LNG plant in Papua.

"We only utilize imported LNG to fulfill gas demand which cannot be fulfilled by domestic sources. When there is available domestic sources, other buyers can take our allocation from both Africa and Australia," Djohardi said.

According to Pertamina's calculations, the gas demand from non-fertilizer industries will hit 1,178 million standard cubic feet per day (mmscfd) in 2014, 1,580 mmscfd in 2018 and 1,797 mmscfd in 2020.

The data recorded that the consumption was only 818 mmscfd in 2008.

Posted in: Asia-Pacific

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