Government mulls gas import

The government is considering to import gas for the western region of Indonesia in a bid to provide cheaper gas for industries in the region.

This was said by interim Minister of Energy and Mineral Resources Luhut Panjaitain in a statement on Tuesday.

He said that the directorate general of oil and gas at the ministry is currently reviewing the gas import option.

?If in western part of Indonesia, for example Aceh must bring LNG from Papua, the cost of distribution will be quite high. So we could try importing cheaper gas from other countries probably from Brunei or the Middle East where prices are around US$3.5-$4 (per mmbtu), and then distributes gas via pipeline to Medan, where our calculation gas price could be $7-$8, a (significant) reduction from the current $13 level.? Luhut explained.

Elsewhere, Luhut said that the ministry is also assessing the possibility of introducing distribution zones to help reduce domestic gas price for industries. Under the plan, the government will apply three zones, Indonesian western, central and eastern regions.

Editing by Reiner Simanjuntak