Eric Watkins
Senior Correspondent
LOS ANGELES, Oct. 27 -- Indonesia expects to reduce its LNG exports by 10% due to lower production in aging gas fields at Kalimantan and Aceh, according to Eddy Purwanto, deputy of marketing and finance for the Upstream Oil and Gas Regulatory Agency (BP Migas).
It's the second time in the past year that the Southeast Asian nation has announced reductions in shipments. Last February, Indonesia's reputation as a reliable supplier of LNG came into question due to a new disruption of supply, even as it was seeking to ramp up production (OGJ, Feb. 14, 2005, p. 29).
"The customers are requesting more shipments, but we won't be able to meet them," Purwanto said Oct 22. "We are seeing quite a significant decline (in gas supply), while the new reserves discovered are not as big as we expected them to be."
He said Indonesia may be able to offer only as much as 6 million tonnes/year of LNG—half of its current contract—to Japan after its contract expires in 2010.
Meanwhile, Purwanto said, buyers in South Korea, Taiwan, and Japan have agreed to cut supply from the Bontang plant in East Kalimantan by 30 shipments—equal to 1.8 million tonnes LNG—from the ordered 370 shipments.
He also said Indonesia is seeking to "adjust" nine shipments—totaling 580,000 tonnes of LNG—of the 75 shipments booked from the plant at Arun in Nanggroe Aceh Darussalam.
But even with the reduced volume, Purwanto said, Indonesia might lack 5-8 shipments to meet remaining orders.
Arun is supplied by ExxonMobil Oil Indonesia, which operates the gas field in Aceh. PT Badak NGL in Bontang receives gas from Unocal Corp., Vico, and Total SA.
The government has been trying to reduce or reschedule LNG exports, particularly as fertilizer plants in Aceh have been forced to shut down due to lack of natural gas.
Contact Eric Watkins at [email protected].