Indonesia Approves Plan for Private Industry to Import Gas

Facing a shortage of natural gas supply to feed growing domestic demand, LNG exporter Indonesia has approved a plan to allow private firms to import natural gas from abroad.

Although Indonesia is the world's third largest exporter of liquefied natural gas, production from the nation’s three LNG plants, Arun in Aceh, Bontang in East Kalimantan and Tangguh in Papua, is committed for sale overseas in long-term contracts.

With the country unable to meet the energy needs of its fast-growing industries, the government will now allow local companies to import liquefied natural gas, commented  Industry Minister M.S. Hidayat.

“The president, in a cabinet meeting, has approved in principle the plan for firms to import gas,” Hidayat said, adding that the importable volumes would be determined later.

Ministry data estimates business demand for LNG this year to reach 2,798.69 million standard cubic feet per day (mmscfd), and 3,283 mmscfd by 2015. But the country’s state oil and gas company, Pertamina, and state gas distributor, Perusahaan Gas Negara, can only meet half of that demand because most of the natural gas produced here is for export.

Likely suppliers to Indonesia would include Qatar, Australia and Papua New Guinea.

Indonesia is expected to export 362 LNG cargoes in 2011, down 15% from last year.