Eric Watkins
Senior Correspondent
LOS ANGELES, Mar. 1 -- Indonesia will not consider exports of natural gas to neighboring Malaysia and Singapore beyond current contracts, citing instead the need to meet rising domestic demand.
Minister for Energy and Mineral Resources Purnomo Yusgiantoro said the decision to stop further gas exports to the two countries was based on Presidential Regulation No.5/2006, which calls for priorities to be given to domestic demand.
"We no longer accept any demand for new shipments to Singapore and Malaysia because all the production would be used at home," the minister said.
He added, however, that the government would continue to supply the two countries with gas under existing export contracts. "It is impossible for us to halt the exports if their contracts have already been signed," he said.
Gas for Singapore and Malaysia, supplied from fields in South Sumatra and Natuna, is piped by Indonesia's state-owned national gas company PT PGN.
Indonesia has been experiencing difficulty over the past several years in meeting export supply contracts of LNG to major buyers such as Japan, Taiwan, and South Korea.
Last May, Indonesia's Vice-President Jusuf Kalla told Japanese investors that his country's future priority for gas would be to meet domestic demand and not exports of LNG (OGJ Online, May 26, 2006).
In January, Indonesian officials underlined that view, saying they awaited publication of reliable figures on the country's gas resources before deciding new policies governing construction of domestic pipelines and future exports (OGJ Online, Jan. 16, 2007).
Contact Eric Watkins at [email protected].
