Govt allows PLN to import LNG
Wednesday, April 23 2014 - 01:04 AM WIB
The Jakarta Globe quoted Hendra Fadly, the Director of Upstream Oil and Gas at the Ministry of Energy and Mineral Resources as saying, said that ?Indonesia will not gush out natural gas forever? and that importing LNG was consequently ?very likely.?
According to Hendra, PLN may import LNG soon despite a favorable outlook on domestic production, as the shale gas revolution in the United States has helped drive down prices of gas.
?It is better to import LNG cheaply and export [our] gas at a higher price,? Hendra said. The price of natural gas on the spot market in the US hovers at around $4 to $5 per million metric British thermal units (mmbtu), while Indonesia can fetch as much as $16 per mmbtu from exports.
But Bisnis Indonesia daily quoted Naryanto Wagimin, Director of Oil and Gas Program Management at the ministry, as saying that PLN can make the import only after it obtains permit from the ministry.
He also suggested PLN to make the import in 2019 as the current price of LNG is high and the import price is quite high as well.
PLN?s gas division chief Suryadi Mardjoeki said previously that the company would need 28 cargos of liquefied natural gas (LNG) this year. The number will double to 56 cargos in 2015 and is expected to increase to 60 the following year.
Of the total cargos needed next year PLN has secured 22 from the Bontang plant in East Kalimantan and 12 from the Tangguh plant in Papua.
?We have requested that SKKMigas [the Upstream Oil and Gas Regulatory Task Force] allocate us LNG. If there is no allocation, we must import,? Suryadi said. (*)