Indonesia: Importing Gas Not Solution

Indonesia: Importing Gas Not Solution

The Energy and Mineral Resources Ministry has stated that the proposal of
the Indonesian Petroleum Association (IPA) to import gas will not help the
government's effort to curb gas prices applicable to the industry.

The proposal is one of the many options to cut gas prices for industries,
Director General of Oil and Gas at the Energy and Mineral Resources Ministry
IGN Wiratmaja Puja said on Monday, October 10.

"There are many options to bring down the gas prices, from upstream,
midstream to downstream levels. But we have to look at the data in detail,"
he noted.

Purchasing gas from other countries will not significantly affect the global
gas prices, he added.

If Indonesia intends to import gas, it must be far cheaper than the locally
produced gas. In addition, the nation must also consider additional charges
accrued in transporting gas from abroad and the cost to change it into
liquefied natural gas (LNG), he reminded.

"Admittedly, when bought from Qatar, gas will be slightly cheaper, but if
the cost of transportation is added to the price, then it will not be much
different from that of local gas. The US gas is currently being sold at
US$2.5 per mmbtu but we need to study the cost to change it into LNG to
facilitate its shipment to the rest of the country. Clearly, it will not be
able to help us very much," he pointed out.

He underlined that the policy to import gas must consider the situation on
the domestic production front. The concept of supply and demand will
prevail. Besides, the policy gas import will not be allowed in case of
overproduction.

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Ref:
http://en.tempo.co/read/news/2016/10/11/056811240/Importing-Gas-Not-Solution

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com