Indonesia targets domestic market for LNG sales

Indonesia’s state-owned PT Pertamina and state gas distributor PT Perusahaan Gas have found domestic buyers for most of the liquefied natural gas to be produced from their planned floating terminal in Teluk Jakarta Bay.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Jan. 25 -- Indonesia’s state-owned PT Pertamina and state gas distributor PT Perusahaan Gas have found domestic buyers for most of the liquefied natural gas to be produced from their planned floating terminal in Teluk Jakarta Bay.

"In 2011 we require huge amounts of LNG to fuel our power generators and we will probably absorb 80% of LNG supplied through the floating terminal," said Dahlan Iskan, recently appointed as president director for state power company PT Perusahaan Listrik Negara (PLN).

“We also asked Pertamina to immediately begin the construction of the terminal because the supply gas for PLN will depend on the terminal," said Dahlan, who added that a failure to access LNG supply would force the firm to use gasoline, “which is more expensive.”

In 2009, PLN predicted it would require 2,233 MMscfd in 2010, about 1,300 MMscfd more than the available supply of about 900 MMscfd. But the firm sees increased demand growth, saying it will need 2,474 MMscfd by 2012, while the domestic supply may only be 1,781 MMscfd.

Meanwhile, most of the remaining supply from the Teluk Jakarta site also will go to the domestic market, according to Evita H. Legowo, director general for oil and gas at the Energy and Mineral Resources Ministry. She said “state fertilizer company PT Pupuk Kujang will absorb 18% of supply from the LNG terminal.”

The Teluk Jakarta LNG terminal, 70% owned by Pertamina and 30% by PGN, will eventually have a capacity of 500 MMscfd, and is expected to take $200 million of investment before going online by September 2011.

The terminal is said to be part of Jakarta's program to provide gas infrastructure to meet increasing domestic demand growth in the country, especially from the electricity sector.

Contact Eric Watkins at hippalus@yahoo.com.

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