Gas produced after contract expiry to be used for domestic needs

Gas produced after contract expiry to be used for domestic needs

Rudi Rubiandini. (ANTARA/Zabur Karuru)

"There is no guarantee of gas supply from a number of LNG terminals at home yet."
Jakarta (ANTARA News) - After the work contracts of companies producing gas for exports expire, the gas produced will be used to meet domestic demand, according to Deputy Minister for Energy and Mineral Resources Rudi Rubiandini.

"The government has determined that the gas produced after the expiry of those contracts would no longer be exported but be distributed to meet local requirements," he said here on Friday.

"The extra gas will be distributed to domestic industries based on their respective infrastructural capacities," Rudi added.

He noted that the contract for the production of liquefied natural gas (LNG) in Bontang, East Kalimanatan, will expire in 2018.

"The volume of gas production in Bontang is huge," Rudi said, adding that the gas produced there after the contract`s expiry would be distributed across the country.

"But before that, in order to meet our rising domestic demand, we will use the gas produced from Tangguh in West Papua, because our contract with Sempra Energy of the United States has ended," Rudi stated.

Rudi said the government was also committed to implementing the domestic market obligation (DMO) policy for the development of new gas fields.

"We now have Senoro in Central Sulawesi, which accounts for 30 percent of the total gas distributed, while Tangguh train III accounts for 40 percent," he pointed out.

Rudi stated that if the domestic gas supply fell short of demand, Indonesia would have to import the commodity.

"It is likely that the price of imported gas is lower because there is abundant supply of it overseas," he said.

"There is no guarantee of gas supply from a number of LNG terminals at home yet," Rudi noted.

The floating gas terminal in Jakarta Bay, which has a capacity of 3 million tonnes per annum, is already in operation but it has only managed to produce 1.5 million tonnes per annum so far.

Meanwhile, the Arun gas terminal in Aceh also produces one million tonnes of gas per annum, despite having a maximum capacity of three million tonnes per annum.

The same is the case with other floating terminals in Central Java and Lampung of Sumatra, each of which has a capacity of three million tonnes per annum. These terminals have not yet made any commitment on the volumes of gas they would supply.
(Uu.A014/INE/KR-BSR)

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