Jakarta Post
The Jakarta Post, Jakarta
Japan, South Korea, and Taiwan plan to divert 12 liquefied natural gas (LNG) cargoes from RI to other markets.
The decision was taken because the economic downturn has reduced demands in these biggest Asian importing countries, head of LNG business at state oil and gas company PT Pertamina Hari Karulianto told reporters Friday
The countries may re-sell the LNG from Indonesia to other Asian buyers or to Europe, he said.
“They will not drop the imports [from Indonesia],” Hari said on the sideline of a discussion on LNG investment prospects in Asia Pacific, “It is still in the negotiation process.”
He added that the volume of the diverted cargoes is also not yet clear, “It could be about twelve cargoes.”
One cargo of LNG approximately contains 3 million MMBTU (million British thermal units) of gas.
According to Hari, the biggest diversion might come from Japan which seeks to divert six cargoes of LNG from Indonesia this year.
Japan is the world’s biggest importer and user of LNG. Data from Facts Global Energy shows that Japan’s LNG imports in 2014 reached 69.3 metric tons per annum (mtpa), up from 66.8 mtpa in 2014.
Indonesia started exporting LNG to Japan in 1978 from Arun in Aceh Province, and in 1981 from Bontang in East Kalimantan These export contracts will expire in 2014 and 2015 respectively.
But concerning LNG export contracts from Bontang, Indonesia and Japan have recently signed a 10-year extension to the current sales agreement.
Under the extension contract, Indonesia will supply 3 mtpa of LNG in the first five years and 2 mtpa in the second five years. Previously, Indonesia supplied 12 mtpa of LNG to Japan per year.
Hari said that unabsorbed LNG retained on the local market could be used for making liquefied petroleum gas (LPG) for domestic demand which has gone up due to the government’s kerosene-to-LPG conversion program.
Pertamina’s deputy director for marketing and trading Hanung Budya said earlier the company might not import more LPG if it could get additional supply from Bontang.
In a related development, Lukman Mahfoedz, president director of PT Medco E&P Indonesia, a member of the consortium developing the Donggi and Senoro gas blocks in Central Sulawesi, said that LNG from the two blocks would begin to be delivered by the end of 2012, with a volume of 2 mtpa.
HoA (Heads of Agreement) with Japanese Kansai Electric Power Co. Inc) and Chubu Electric Power Co. Inc) were signed by the end of February with each company to be supplied one mtpa respectively.
Lukman said the consortium expected to obtain immediate government approval for project construction to begin. “As of today, 97 percent of the land has been cleared. The engineering design process also has been started. Thus, we are ready to move on,” he said.
Medco E&P holds a 20 percent participating interest in the project, while PT Pertamina holds 29 percent and Japan-based Mitsubishi Corp. has the remaining 51 percent.
Indonesia puts high expectations on the project to give a needed boost to the country’s gas production.
Upstream oil and gas regulator BPMigas has targetted a total of 7.50 billion cubic feet per day for the country’s 2014 gas production, only slightly higher than the 7.46 billion cubic feet of gas per day produced last year.
