MEMR promotes use of LNG in sea transport

The Ministry of Energy and Mineral Resources (MEMR) is seeking to promote the use of cheaper LNG in sea transport in a bid to help reduce the consumption pricey diesel fuel.

Director General of Oil and Gas at the ministry, A. Edy Hermantoro said in a press statement Tuesday that better cooperation particularly with the Ministry of Transportation and the shipping industry is required to help realize the plan.

He explained that LNG is the most economical fuel alternative for sea transport particularly as the government has banned the use of subsidized fuel for non-pioneering shipping routes. Large vessels are now obliged to use non-subsidized fuel, which is quite costly.

He argued that while cost of diesel fuel runs at an equivalent of US$25 per mmbtu, LNG price is only $12-13 per mmbtu. ?If the price is only half, then the shipping industry should be willing to use gas,? Eddy said. However, acknowledged that the industry wants much lower price of around $4 per mmbtu, or equal to the price of gas onshore. ?Price has been the key obstacle,? he said.

He is hopeful, however, that the use of LNG in sea transport will eventually increase as it generally will reduce cost. To help facilitate the supply of LNG for the sea transport, the government plans to develop offshore LNG mini terminal, he added.

Editing by Reiner Simanjuntak