LNG is still too expensive for local use
Tuesday, May 23 2000 - 04:10 AM WIB
The domestic use of liquefied natural gas (LNG) is still too expensive due to its high transportation and production costs, according general manager of PT Badak NGL Bontang Sahari.
Sahari said that the use of the LNG would be only feasible if the distance between the supplier and its buyers exceeds 2,500 kilometers and if the buyers could be accessed through sea transportation facilities, Bisnis Indonesia reported on Tuesday.
"The use of LNG in the country is still too expensive to other energy alternatives. That is why the use of natural gas is still more profitable although we have to build pipeline networks to distribute the gas," he said
Badak NGL Bontang, which operates six LNG plants in Bontang, East Kalimantan, has a contract agreement until 2017 to supply its LNG to Japanese buyers.
Sahari said that if the contract is not renewed, the huge natural gas reserves, which are at present used by the company, should be used for domestic use.
About 42.8 trillion cubic feet (TCF) of gas reserves available from local gas companies to support the company's LNG operation. About 32.3 TCF had been used and sold in the form of LNG.
Saleh said the total gas reserves could reach 19.5 TCF if the amount of the unproven gas reserves is included. "If the future consumption for LNG reaches 12.54TCF, there will be a surplus of about 7 TCF in the natural gas supply, that could used for local consumption. (*)