No decision has been made on exports of Bontang LNG to Japan: Report

No deal has been signed on shipment of Bontang LNG to South Korean firm KOGAS, as Minister of Energy and Mineral Resources Darwin Z. Saleh is still discussing with BPMigas on Japan's request for LNG and oil supplies, Reuters reported

Since KOGAS, the world's top corporate buyer of LNG, has already said it will supply 400,000-500,000 tons of LNG to Japan, it is possible that some of the KOGAS commitment could also come from Indonesia.

The deadly earthquake that hit Japan last week took about a fifth of Japanese nuclear power plant capacity or 9,702 megawatts offline, and analysts say LNG is the most likely replacement for nuclear power.

Japan's vice-minister of foreign affairs Makiko Kikuta met government officials in Jakarta on Thursday and asked the country to supply more LNG and also crude oil, to replace a "massive shortage" of electricity.

"A team from the energy Ministry and BPMigas is evaluating it... the government is considering many factors on gas allocation -- domestic and overseas demand -- and considers proper ties with its main markets," Indonesia Energy Minister Darwin Saleh told reporters.

In trying to procure LNG, Japan has been dealing directly with producers and sometimes even governments, by-passing traders and brokers in the spot market in search of secure supplies.

But Indonesia, the world's No. 3 LNG exporter after Qatar and Malaysia, is increasing its use of natural gas at home to avoid costly imports and dwindling domestic supply. Its exports of LNG will fall to 362 cargoes this year from 427 in 2010.

"It will be decided by the President. Personally, I think this is a sensitive issue to be answered. The impact will be very political," said Industry Minister M.S Hidayat.

Japan has committed up to $52.9 billion in infrastructure investments over the next 15 years in Indonesia, as Southeast Asia's biggest economy tries to overhaul its transport network to spur growth but can only fund one third of its needs. (*)