Data to determine government's gas policy to be issued soon

The Jakarta Post, Jakarta

Long-awaited projections of the country's long-term gas supply and needs will be issued later this month, providing the government with reliable figures on whether or not it should go ahead with its liquefied natural gas (LNG) export policy and interisland gas pipeline projects.

"I hope the preparation of the gas supply and needs projections will be completed this month," the Energy and Mineral Resources Ministry's director general of oil and gas, Luluk Sumiarso, told the Suara Pembaruan daily Wednesday.

He said that the gas projections would provide information on proven gas reserves and potential demand in nine gas-producing provinces, including Nanggroe Aceh Darussalam, North Sumatra, South Sumatra, Jambi, West Java, Central Java, East Java, East Kalimantan and Papua.

"The data will be used as the basis for deciding whether or not we will go ahead with the plan to build a gas pipeline linking East Kalimantan and Central Java, and to determine our future export policy," he said.

PT Bakrie & Brothers won tenders from the downstream oil and gas industry regulator, BPH Migas, in July to build and operate the 1,115-km pipeline linking East Kalimantan and Central Java.

However, the construction of the $1.26 billion pipeline project has been delayed due to a lack of gas supplies.

Current gas production in East Kalimantan is only enough to supply the PT Badak NGL liquefied natural gas plant, the country's largest LNG producer.

Energy and Mineral Resources Minister Purnomo Yusgiantoro had said that the fate of the pipeline project would be determined after the issuance of the gas supply projections.

Purnomo said that the government might also choose to use LNG tankers, instead of building pipelines, to overcome gas shortages in Java.

Due to the decline in gas production, the government had planned to cut LNG exports by 19 percent to Japan, South Korea and Taiwan this year.

Indonesia may ship 19.4 million metric tons of LNG this year, less than the contracted 24 million tons. Pertamina is also negotiating the postponement or replacement by other producers of 36 cargoes from the Badak plant and 22 from Aceh-based LNG producer PT Arun NGL.

Luluk said the government was still committed to exporting LNG based on existing contracts, even if there was a shortage of gas supplies at home.

The gas supply projections will only affect future export policy, he said.

According to figures issued by the Energy and Mineral Resources Ministry, Indonesia's total gas reserves stood at 187.1 trillion standard cubic feet (TSCF) last year, up from 185.8 TSCF in 2005.

Last year, Indonesia produced a total of 8.10 billion standard cubic feet per day. About 54 percent of the total gas production was exported, mostly in the form of LNG. The remaining 46 percent was sold on the domestic market.
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