Govt to form team to renegotiate LNG export contracts

Minister of Energy and Mineral Resouces Darwin Zahedy said that the government would no longer increase the volume of liquefied natural gas (LNG) exports in order to support the government?s commitment to use the larger part of the gas production for local industries especially state electricity company PLN.

Speaking at his office on Monday, the minister said that the ministry would soon establish a special team to evaluate and review the existing contracts which could be affected by the plan.

?The government in principle has serious commitment not to increase LNG exports as the priority to use gas production will be given to local industries especially PLN, and fertilizer producers,? he said. He, however, did not explain whether the policy would result in lower LNG exports in the future.

In order to support the program, the construction of distribution facilities would be one of the government?s top priorities. At present, the lack of pipeline networks have hampered the distribution of gas to local industries.

A number of companies including PLN, state oil and gas company Pertamina and gas utility company PGN plan to build floating LNG receiving terminals to cope with the shortage of the pipeline networks. The floating terminals will be used to distribute LNG both from local and foreign producers. (romel)