Indonesia ready to supply LNG
Indonesia ready to supply LNG
Fitri Wulandari, The Jakarta Post, Jakarta
Indonesia is ready to supply liquefied natural gas (LNG) to Singapore's planned LNG terminal, a senior official said on Monday.
"Singapore has market potential, but not that great, so it won't be a problem," head of the Oil and Gas Upstream Regulatory Agency (BP Migas) Rachmat Sudibyo told The Jakarta Post.
Rachmat said Indonesia had been sending natural gas to the city state through underwater pipelines from Sumatra and West Natuna, but the amount of gas that could be delivered via the pipeline was limited.
Thus, Singapore's plan to establish an LNG terminal would enable Indonesia to send more gas to the neighboring country from other parts of the archipelago.
LNG could be taken from locations such as the Bontang LNG plant, East Kalimantan, or the Tangguh plant in the Bird's Head area of Papua, which is under construction.
The Tangguh plant, operated by a consortium led by Anglo- British energy giant BP Plc, will be the third in Indonesia. Tangguh will have capacity to produce 7 million tons of LNG per annum.
At present, Tangguh has secured a contract to supply 2.6 million tons per year to China's Fujian province, starting 2007. Two LNG sales contracts are being finalized. Tangguh has signed heads of agreement to supply 1.1 million tons per year to South Korea power firm SK and steelmaker POSCO. It also signed heads of agreement with U.S.-based Sempra Energy to supply 3 million tons a year for 25 years to the U.S. market.
Rachmat said thus far no negotiations to export LNG to Singapore had been held.
The Singapore government said on Monday it was giving consideration to building the city-state's first liquefied natural gas (LNG) terminal as a way of meeting its long-term power needs.
The Ministry of Trade and Industry said a feasibility study to be commissioned over the next one to two months would determine the project's economic viability.
The project is reported to cost at least S$1 billion (US$588 million) and take five years to build.
An ministry spokeswoman said a decision on the project would be made "in due course" following the feasibility study, but she highlighted the benefits of an LNG terminal for Singapore.
"This will be a project to position ourselves to meet Singapore's long-term energy needs," the spokeswoman said in an e-mail to AFP.
"There may be opportunities to tap LNG to meet future growth in energy demand and create new economic activities from managing the LNG business," she said.
The Straits Times, in its Monday edition, said aside from domestic consumption, Singapore expected the LNG terminal to position it as an energy trading center.