India, China seen as new markets for RI gas

India, China seen as new markets for RI gas

SINGAPORE (AFP): Indonesia is looking at China and India as
new markets for its massive natural gas reserves as the
government moves to boost domestic demand with a plan to slash
oil subsidies, industry experts said Wednesday.

Political turmoil in Indonesia, including separatist threats
in oil and gas producing areas, were unlikely to derail plans to
develop more gas fields and build a network of undersea pipelines
to bring the commodity to land-based users, they said.

John Karamoy, president of the Indonesian Gas Association,
said in a news briefing Southeast Asia's largest country has
natural gas reserves estimated at more than 100 trillion cubic
feet still to be tapped and marketed.

Sofian Farhan, director for natural gas supply at state-run
oil and gas firm Pertamina, said China and India were emerging as
potential export markets aside from traditional buyers like
Japan, Thailand and South Korea as more fields are developed in
the next 10 years.

Indonesia has earmarked production from its Tangguh field in
Irian Jaya for the Chinese market, he said.

He said "discussions on the official level and company to
company level" have started, a delegation from Pertamina was in
China for further talks.

Natural gas from Indonesia's West Natuna field is to start
flowing via a pipeline into Singapore by January next year, two
months ahead of schedule, he said.

This will be under an US$8 billion contract with a consortium
led by Singapore's Sembawang Corp. to purchase 325 million cubic
feet of gas per day from Indonesia for 22 years.

Another contract with Singapore Power was expected to be
signed next month and the laying of the pipeline commencing "very
soon."

Last month, Malaysia's Petronas signed a milestone gas
purchase agreement with Pertamina to buy 1.5 trillion standard
cubic feet of natural gas from Indonesia's west Natuna sea field
over 20 years.

Parallel to expanding the overseas market, the government was
also expected to announce a cut in its huge subsidies to the oil
sector which totaled $5 billion this year, Farhan said.

This would make the price of natural gas more competitive and
boost domestic demand, he added.

A new law expected to be passed by parliament by mid-next year
which would deregulate the natural gas industry was also expected
to encourage investors.