Indonesia govt allows key industries to import natural gas

Indonesia govt allows key industries to import natural gas

The nation industries' hungry for natural gas and more expensive domestic
price have prompted the Indonesian government to allow key industries to
import the gas.

Indonesia is one of natural gas (LNG) producer, however, significant portion
of gas are exported to overseas buyers under long-term contract.

The Indonesian government has in recent years encouraged domestic industries
to use more gas, however, lack of infrastructure and relatively expensive
gas price have resulted in low usage of domestic gas by local industries.

In addition, domestic demand for natural gas is projected to increase in the
coming years, with some observers projected Indonesia to begin importing LNG
from abroad from 2019. Pertamina, as a case in point, has earlier signed a
deal with Cheniere of US to import LNG.

The Joko Widodo government has tried to push down domestic gas price.
Recently, it issued ruling to lower gas price to below US$6 per MMBTU to
three industries, namely fertilizer, petrochemical and steel.

"To push gas price to below USD6 per MMBTU, then room is given to industries
to import gas directly at certainly lower price," Cabinet Secretary Pramono
Anung said at a press conference after a cabinet meeting at the Presidential
Office (Jan. 24).

The cabinet meeting was led by President Joko Widodo and attended by key
economic ministers, namely Coordinating Minister for the Economy Darmin
Nasution, Coordinating Minister for Maritime Affairs Luhut Panjaitan,
Finance Minister Sri Mulyani Indrawati, Energy and Mineral Resources
Minister Ignasius Jonan, Industry Minister Airlangga Hartarto and other
ministers.

Meanwhile, Minister Darmin said that the government is still studying the
gas import mechanism, whether it will be done directly by the industry or
done by industrial zones.

"The President has decided to allow importing gas. Who will import? It will
be formulated by the energy (ESDM) and industry ministries within two
weeks," Minister Luhut Panjaitan said.

Minister Jonan said the government is still trying to ensure gas price is
lower than at present that industries can produce a more competitive
products.

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Link to Original Article:
http://www.rambuenergy.com/2017/01/indonesia-govt-allows-key-industries-to-i
mport-natural-gas/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com