Oilfields development
Indonesia Considers Small LNG Receiving Terminals
Indonesia, the world's number-three LNG exporter after Qatar and Malaysia, is increasing its use of natural gas at home to avoid costly imports and dwindling domestic supply.
"The prospects of it are quite big for various areas, because we are an island country," said the ministry's Kardaya Warnika, adding that some of the terminals being considered were located in Sulawesi, Bali and other islands.
Warnika said the capacity for such plants would be less than 160 million cubic feet per day of gas, with a cost of less than $200 million per plant.
The country's first LNG receiving terminal, a 3 million tonnes a year joint venture near Jakarta between state energy firm Pertamina and local gas distribution firm PT Perusahaan Gas Negara (PGN), is expected to be built by Golar LNG and commissioned by the end of next year.
The costs of setting up an LNG plant mean small gas deposits are often overlooked, but Warnika said the aim was to increase the sustainability of the country's supply.
"If we can access the energy, then we can make use of it....then we can strengthen energy sustainability," he said.
Tony Regan, an LNG consultant with Tri-Zen International in Singapore, said that the prospects for building small and medium scale LNG receiving terminals in Indonesia were good, citing improved technology and the relative cheapness of gas.
"There's such a big differential between the prices of gas and oil that compared to that, LNG looks cheap," Regan said. U.S. spot natural gas prices NG-W-HH hit a 10-month low last week and gas futures remain by far the biggest loser of 2010 on the Reuters Jefferies CRB Index of 19 commodities CRB, down about 35 percent so far this year. Hefty supplies mean prices are likely to stay low into next year.
