Japan, Indonesia set up panel for stable LNG supply

Japanese trade minister and the visiting Indonesian energy minister agreed Tuesday to set up a working panel to ensure that Indonesia will keep supplying liquefied natural gas and other energy resources to Japan in a stable fashion, Kyodo News reported.

"Both sides recognize that the security of supply of natural gas including LNG is important not only in the context of economic development, but also in terms of strengthening the partnership between the two countries," Japanese Economy, Trade and Industry Minister Akira Amari and Indonesian Energy and Mineral Resources Minister Purnomo Yusgiantoro said in a joint statement issued after their one-day meeting in Tokyo.

The two countries will use the envisaged panel to "exchange information on policy, development and security of supply in oil and natural gas," the statement said.

Amari and Yusgiantoro agreed to launch the panel as early as possible, a Japanese official said.

The two ministers did not go into specifics of the current bilateral LNG supply contracts, which will expire in 2010 and 2011, only saying both sides "pledge to honor the existing contracts," according to the statement.

Yusgiantoro told Amari that there are other LNG projects going on in Indonesia and called for Japan's investment in these projects, the official said.

Japan is poised to secure long-term commitment for stable energy supply from Indonesia, the No.1 supplier of LNG to Japan. But Indonesia is reportedly considering sharply cutting shipments to Japan from 2010 as its domestic demand is growing rapidly.(*)