Gas Processing is Produced by Gulf Publishing Company

Indonesia unlikely to need imported LNG until 2020 as output to rise

JAKARTA (Reuters) — Indonesia is unlikely to need to import LNG until at least 2020 due to robust gas production at home, a senior government official said on Wednesday, even as the government has pushed increased domestic gas consumption.

"Our production has turned out to be better than predicted," the country's Director General of Oil and Gas, Wiratmaja Puja, told reporters on Wednesday. "So there's a high possibility we won't need to import in 2019."

Puja was referring to higher-than-expected output from the Jangkrik gas field operated by Eni. The field was designed to produce 450 MMcfd of gas but output could be up to 600 MMcfd, he said.

Currently the world's fifth-biggest exporter of LNG, Indonesia has lost market share to new production from Australia and Qatar and as output is reserved for domestic needs. However, the domestic gas market has not developed as anticipated even after the government promoted the fuel to replace coal for power plants and as an industrial fuel.

Power plant developers in Indonesia are still relying on cheaper coal, however, which has curtailed the development of gas infrastructure.

Puja also called into question imports after 2020 when he mentioned BP's Tangguh Train 3 project will supply more gas to Indonesia from 2020 onwards.

"At the end of 2020 we won't need to import," he added.

The comments come even as Australia's Woodside Petroleum inked a contract in April to supply Indonesia's state-owned energy company Pertamina with LNG from 2019 to 2034. Pertamina also has a LNG import deal with US-based Cheniere Energy Inc from 2018 and ExxonMobil Corp from 2025.

Puja suggested those supplies could be redirected to other LNG buyers in Asia, particularly Bangladesh. "We are pushing Pertamina to go global," he said.

When contacted by Reuters, Pertamina's Vice President for LNG, Didik Sasongko, supported that idea.

"We can use it for trading or to optimize Pertamina's LNG portfolio," Sasongko said, referring to the Cheniere deal. "There's flexibility on delivery," he said when asked about the Woodside imports.

Meanwhile, Puja said that Indonesia is looking for buyers for 16 to 18 uncommitted LNG cargoes for this year.

He expects an average of 50 to 60 uncommitted cargoes per year until 2035.

Reporting by Wilda Asmarini and Bernadette Christina Munthe; Writing by Fransiska Nangoy and Fergus Jensen; Editing by Christian Schmollinger

Copyright © 2018. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


Editorial comment
-Adrienne Blume
According to GIIGNL’s 2018 Annual Report, global LNG trade expanded by 3.5 Bft3d in 2018, to 38.2 Bft3d—a record 10% increase.
Power, LNG projects drive pipeline construction in Africa
-Shem Oirere
Increasing public investment in gas-fired power plants in Africa, the continuing recovery in global oil prices and persistent insecurity in key producer markets, such as Nigeria, are likely to impact gas transmission pipeline projects on the continent, even as more international companies express interest in the region’s stranded gas resources.

Maximize Profitability with Advanced Analytics at Natural Gas Processing Plants

View On-Demand

Incorporating economic data into process modeling is key to optimizing operations and maximizing profits at gas processing plants. However, maintaining optimal operations are often challenging due to changing market dynamics, contract structures and increasing process flexibility. Today, gas processors are leveraging Predictive Control and First Principles models to accurately determine and control the optimal operating targets in real time based on the most current plant conditions and profitability, optimizing recovery of natural gas liquids. Learn how real-time analytics, combined with decision support tools, empower companies to:
•Improve processing margins by up to 5%
•Maximize NGL production through improved availability and optimized process conditions
•Improve compositional control to operate closer to product specifications

May 22, 2018 10am CDT

View On-Demand


Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2018 Gulf Publishing Company.