LNG exports to rise 6.2% in 2008

Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Thu, 04/24/2008 12:26 AM  |  Business

Liquefied natural gas (LNG) exports from Indonesia will rise by 6.2 percent this year due to increased gas production, an official said Wednesday.

State oil and gas firm Pertamina vice president, Iin Arifin Takhyan, said Indonesia, the world's third-largest gas exporter, would export 22.1 million tons of LNG this year, compared with 20.8 million tons last year.

Iin said the increase was partly due to the success of French oil giant Total in increasing gas production in Mahakam block in East Kalimantan, whose output was delivered to the country's biggest LNG plant in Bontang, also in East Kalimantan.

"Of the total 22.1 million tons, 19.6 will come from Bontang and the remainder (2.5 million tons) will come from Arun," Iin said.

Arun is an LNG plant in Nanggroe Aceh Darussalam.

Last year, Arun produced 2.8 million tons of LNG and Bontang produced 18 million tons, all of which was exported to meet the country's export commitment of 24 million tons per year until 2010.

Indonesia has failed to meet its export commitment in the past few years because of the decline in the country's gas production, due mostly to the aging fields.

Total last year announced the discovery of two new gas reserves in its Mahakam block in East Kalimantan. It said the discovery had strengthened the block's potential to produce gas.

Indonesia exports LNG from two LNG plants in Arun and Bontang. Arun LNG plant has a total capacity of 12.5 million tons per year with six processing units (trains). Bontang has a total capacity of 18.5 million tons per year with eight trains.

One train in Arun has a capacity of 1.8 million tons per year, and Bontang trains have a capacity ranging from 2.5 to 2.7 million tons per year.

The government has appointed Pertamina to operate those LNG plants.

Iin said after the export contract expired, Indonesia gas production would also drop. He said by 2011, total production from the Arun and Bontang plants would reach 13.4 million tons, of which 3 million tons would be exported to Japan and the other 10 million used for domestic market consumption.

Following increasing demand for gas in the domestic market, the government has decided not to extend the gas export contracts and instead deliver the gas from Bontang to the local industry.

However, in a deal with Japanese buyers, the government has agreed to deliver 3 million tons of gas each year for the five years after the export contract expires in 2010 and 2 million tons per year for the five years after that.

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