Indonesia to become LNG net importer by 2020

Indonesia to become LNG net importer by 2020

Fitch Group's BMI Research said Indonesia is projected to become a net
importer of Liquefied Natural Gas (LNG) by 2020, with an estimated annual
growth rate of 4% over the next 10 years. This was amid the increasing
demand and dwindling output at mature gas fields.

The Jakarta Post reported that the annual growth rate of 4% was attributed
to the biggest demand coming from the power generation sector. However, gas
supplies are set to fall due to natural declines at various mature gas
fields. This would ultimately cause delays to several major projects.

France's largest gas-producer Total E&P Indonesie was estimated to
experience a slump in their supply at the Bontang LNG plant in East
Kalimantan. A drop of 10% was expected this year, citing expenditure cuts in
the current market volatility of oil prices. This was also attributed to the
uncertainties over the ownership of the Mahakam block.

"State-owned Pertamina signed a deal with the United States' Corpus Christie
project starting next year and it also signed an agreement with the United
Arab Emirates (UAE) National Oil Company to purchase LNG supplies from the
UAE counterparts based on needs," the research house said.

"This will see Indonesia becoming a net LNG importer by 2022," it added.

The report said with the country's need for gas imports grows, more term
deals could be coming their way.

Indonesia has exported 3.9 million metric ton of LNG in the first quarter of
the year, a drop by 7.5% year-on-year while falling 15% below the five-year
average.

In May, The Jakarta Post reported the purchase of LNG between Pertamina and
Emirates National Oil company would no longer be carried out through a third
party. The meeting between the Energy and Mineral Resources Minister
Ignasius Jonan and a UAE counterpart Suhail Mohammed Faraj Al Mazroui
sparked discussion over the development of the Ruby gas field in the Sebuku
Block by Mubadala Petroleum, a UAE-base oil, and gas company.

As of May, the value of the investment made by UAE counterparts into
Indonesia reached US$2 billion and an estimated new investment amount worth
US$5 billion following the visit by Suhail.

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Link to Original Article:
http://www.ibtimes.sg/indonesia-become-lng-net-importer-by-2020-10650

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com