LNG market to be saturated by 2010
Tuesday, January 16 2001 - 03:30 AM WIB
Indonesia's dominance in the export market of liquefied natural gas (LNG) will soon diminish with the emergence of new players, especially those from the Middle East such as Qatar and Oman as well as from neighboring country Malaysia.
Indonesia, which currently dominates international LNG market by 45 percent, will have to face tight competition from those countries. According to the president of Bontang, East Kalimantan,-based LNG producer PT Badak NGL Co., IGG Masputra, the competition will reach its peak in 2010.
Nevertheless, global LNG demand would double in 2010 from the current level of 75 million tons per annum. The problem is that most of Indonesia's LNG sales contracts with its traditional buyers would expire by that year also.
"If this situation is not well anticipated, by 2001, we will lost the opportunity to enjoy the booming market," he told reporters in Bontang on Sunday night after receiving ISO 14001 certificate for his company.
He said Indonesia may not be relaxed with the fact that Indonesia was currently the world's largest LNG supplier, with around 27.2 million tons per annum, of which 22.1 million tons were supplied by Badak. The total LNG exports brought in foreign exchange worth Rp 15.5 trillion last year, of which Badak alone raked in $2.8 billion.
He warned that by 2010, many new LNG plants in Middle East and Malaysia would start their commercial production, and they pose serious challenge to Indonesia's dominance in the LNG market.
He said the government should change its LNG marketing strategy, from waiting for the buyers to come to visiting the buyers and looking for new buyers.
In addition, the government should also encourage new gas explorations as the current gas reserves would last within the next 40 years, compared with Qatar which has gas reserves enough for the next 200 years. (*)