Analyst calls on govt to be proactive in marketing LNG

JAKARTA (JP): Energy analyst Tadjuddin Noor Said called on Saturday for the government to be pro-active in seeking new markets for the country's liquefied natural gas (LNG).

Tadjuddin, who is also a former legislator, said the government should not leave state oil and gas company Pertamina and the country's gas industry alone to do the job.

"Our government should realize that all foreign policies are now tightly linked with business interests all over the world. The government thus should set a new paradigm in its foreign policy by pro-actively marketing the country's products for the maximum benefit of the Indonesian people."

"In terms of LNG, the government should now be pro-active in helping Pertamina and the country's gas industry in penetrating new LNG markets in the region to lessen our dependency on traditional markets like Japan, and to maintain our domination in the market," Tadjuddin told The Jakarta Post.

Indonesia, which is now the world's largest LNG exporter with an annual volume of 28 million tons per year, currently accounts for 44 percent of the Asia-Pacific market for LNG which stands at 65 million tons per year.

Indonesia has two LNG centers in Arun, Aceh and Bontang, East Kalimantan.

The government's participation in marketing the country's LNG has also been called for by Atlantic Richfield Indonesia Inc (ARII). a subsidiary of the giant United States energy company Atlantic Richfield Company (ARCO), which along with other energy companies, including British Gas, found a huge gas reserve in the Tangguh area in Irian Jaya last year.

ARII and its partners plan to build an LNG plant in the province.

ARII president and resident manager Leon Codron recently said the company and Pertamina were struggling to market the LNG that will be produced from the Tangguh area as their competitors, including those from Australia, were assisted by their governments in selling their LNG to the emerging market in China.

China is musing a plan to import three million tons of LNG by the year of 2003 and 2004 for its power plants.

The Australian's Nov. 9, 1998 edition said Northern Territory Chief Minister Shane Stone and Western Australian Premier Richard Court, had aggressively approached the Chinese government and met Prime Minister Zhu Rongji over the past 12 months to market the country's LNG.

As the economic crisis has weakened LNG demand in the traditional markets like South Korea, Taiwan and South Korea, all LNG producers across the region are now eying the huge potential market in China which is less affected by the crisis.

Codron called on Minister of Mines and Energy Kuntoro Mangkusubroto to be part of Tangguh's marketing team, complaining that they could not access the Chinese government as their competitor from Australia could due to the absence of government officials in their marketing team.

Kuntoro acknowledged on Friday the government had thus far left Pertamina with the job of marketing the country's LNG but he said the government backed the effort.

Kuntoro said he was ready to be part of Tangguh's LNG marketing team but thus far he had not yet been requested by Pertamina to do so.

"I'll be happy to help market the LNG, if I am requested to do so," Kuntoro said.

Informed sources at Pertamina told the Post that ARCO had asked President BJ Habibie to discuss the Tangguh project in a meeting with Chinese President Jiang Zemin at the Asia-Pacific Economic Cooperation (APEC) summit in Kuala Lumpur last month. But, the president did not touch on the subject.

Tadjuddin said aside from looking for export markets, the government should also look for potential in the domestic market for LNG.

He also called on Indonesia, as the world's largest LNG producer, to take the initiative in forming a world association of LNG producers to take over the control of LNG prices from Japan, the world's largest LNG buyer. (jsk)