RI forced to become LNG middleman as Arun runs out
RI forced to become LNG middleman as Arun runs out
Fitri Wulandari, The Jakarta Post, Jakarta
The Oil and Gas Upstream Regulatory Body (BP Migas) said on
Thursday it was looking to buy liquefied natural gas (LNG) from
rival gas-producing countries to supply its own buyers because
the country's LNG plant in Arun, Aceh could not meet export
commitments due to declining natural gas reserves.
The decision was also made in order to provide natural gas to
fertilizer firms in Aceh, who are facing a shortage, according to
BP Migas' deputy head Kardaya Warnika said.
He said the agency may be forced to buy LNG from rivals
Malaysia, Nigeria and Qatar to meet supply commitments to South
Korean and Japanese buyers. The buyers have refused Indonesia's
offer to delay shipments of LNG from Arun, scheduled for the
first quarter and second quarter of this year.
"We are negotiating with Malaysia, Nigeria and Qatar," Kardaya
told reporters.
LNG production in Arun has been declining due to the depletion
of its gas reserves, he added.
The depletion has forced PT Arun NGL Co. to quit operating
some of its LNG trains in Lhokseumawe, Aceh province. The company
is 55 percent owned by state oil and gas firm Pertamina, 30
percent by U.S. company Exxon-Mobil Indonesia and the remaining
15 percent by Japan-Indonesia LNG Co.
Indonesia has another LNG plant in Bontang, East Kalimantan.
But, at present, the plant has no surplus capacity to cover for
Arun's shortfall.
Kardaya said he hoped that by buying LNG from other countries
to meet Arun's commitment to buyers, natural gas from Arun could
be used to supply fertilizer firms ASEAN Aceh Fertilizer (AAF)
and PT Pupuk Iskandar Muda (PIM) as well.
AAF which is owned by the governments of Indonesia, Malaysia,
the Philippines and Singapore, stopped operating in August but
resumed operations in December only to stop again several days
later when the natural gas supply was halted.
PT Pupuk Iskandar Muda currently only operates one of its two
production plants because of a decreasing supply of gas.
The 2,300 workers from the two firms are concerned about
possible lay-offs if operations do not resume soon.
They warned that should they lose their jobs, it would add to
the problems of the province, which has been torn by the war
between the military and the armed separatist group struggling
for independence.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said Megawati had made the suggestion to end the natural gas
shortages in Aceh province at a Cabinet meeting on Wednesday.
But Purnomo failed to give details on what sort of suggestions
were given by Megawati.
He only said the solution to the problem should consider
macroeconomic aspects, fiscal aspects and socio-political
interests.