Indonesia to allocate at least 2.5 MTPA of LNG to domestic users

Indonesia will allocate at least 2.5 million tonnes per annum of LNG from Bontang and Tangguh domestic users, BPMIGAS top official said on Friday.

BPMIGAS Chairman Kardaya Warnika told reporters on Friday that French oil giant Total EP has been ordered to allocate 1.5MTPA of its uncontracted capacity from Mahakam block and 1 MTPA from BP-operated Tangguh next train.

Total is the biggest gas producer for Bontang LNG with uncontracted gas equivalent to 5 MTPA of LNG said Kardaya. He said that Total was ordered not to sign any extension deal with Japanese buyers before it clinched contract with local buyers.

?More LNG could be allocated to domestic buyers from Bontang when Chevron Corp. Deepwater gas project PoD would be approved by the government, ? he said. Chevron is currently waiting for government?s approval to develop its giant gas reserves offshore East Kalimantan.

Kardaya said that Tangguh has also been ordered to allocated at least 1 MTPA from Tangguh third train, which is estimated to come onstream in 2012.

Domestic users, said Kardaya, included state electricity firm PLN and state gas distribution firm PGN has formed a consortium and negotiation with LNG producers would be led by PGN. ?They will be negotiating on business-to-business basis and we hope thy can seal deal as soon as possible,? he said.

PGN and PLN are separately planning to build LNG terminals in Java, but now talks to jointly build the terminals have emerged.

PLN and Java industrial customers are facing severe gas shortage and government have vowed to allocate more gas to domestic users. (alex/godang)