President supports gas export cuts

The government's policy of cutting gas exports would much benefit Indonesia as countries that currently get the gas supplies from Indonesia would be moved to relocate their industries to Indonesia, President Susilo Bambang Yudhoyono said as quoted by Suara Merdeka Cybernews.

"If buyers of our gas, such as Japan, Taiwan and South Korea, get less supplies from Indonesia, at the time of their contracts expire, we shall propose a new cooperation for them to relocate their industries to Indonesia," the president told reporters on Wednesday during his state visit to Cambodia.

Several officials have announced the government's plans of cutting gas exports in order to meet the needs on the domestic market. The announcement came as Indonesian gas producers were seeking to extend contracts with buyers in several countries, while the buyers were seeking to push Indonesia to cut the price of its gas.

Susilo said relocations of industries to Indonesia would create works for the public and generate more revenue to the govenrment.

Once gas supplies to the domestic market increased, more industries and power plants would use gas as fuel, instead of oil, that is getting more expensive. As a result, the power prices will decrease and industries can produce cheaper products, Susilo argued.

Indonesia is the world's largest gas exporter with the fuel sent in the form of LNG or through pipelines. The buyers of Indonesian gas are among others Japan, South Korea, Taiwan, Singapore and Malaysia. (*)