The gas shortage will continue at least until 2015 although there will be additional supply resulting from the operation of three liquefied natural gas (LNG) terminals in late 2011, state gas distributor PT Perusahaan Gas Negara (PGN) says.
“The gas deficit will reach 385 billion British thermal unit per day [BBTUD] this year and will continue to increase until reaching 713 BBTUD in 2015,” PGN’s president director Hendi Prio Santoso told lawmakers on Thursday.
According to Hendi, PGN’s gas demand in 2010 reaches 1,206 BBTUD, while gas supply amounted to only about 821 BBTUD
PGN expects to begin receiving gas supply from new LNG receiving facilities in 2011 with a supply
volume of 100 BBTUD in the first year, which will be gradually increased until reaching 560 BBTUD by 2015.
Despite the additional supply, the company’s gas balance will still remain in deficit. By 2015, the gas supply is predicted to increase to 1,424 BBTUD, but the demand will have jumped higher to 2,137 BBTUD, Hendi said
PGN has said it has received less gas, because the suppliers have made commitments to export gas. He cited the example of a supply contract from ConocoPhillips
“The contract stipulates the supplied gas is supposed to be at 396 million metric standard cubic feet per day [mmscfd], but the realization is at between 260 to 270 mmscfd or only 65 percent of the commitment,” Hendi said.
He added that a similar thing also happened with a contract signed by PGN and state oil and gas company PT Pertamina. Hendi said Pertamina was supposed to supply 384 mmscfd, but the actual performance on delivery reached 245 mmscfd or 63 percent of committed volume.
“These problems have created real worries and concerns about our gas supply as we are only getting about 80 percent of the contractual obligations due to us,” Hendi said.
The receiving terminals which will be built by PGN and Pertamina are expected to begin operation by the end of 2011. The two companies are preparing three LNG receiving terminals located in East Java, West Java, and North Sumatra with each terminal is designed to have a capacity of between 1.5 and 2 million tons of LNG per annum.
The terminal in East Java will be built and operated solely by Pertamina, while the terminal in North Sumatra will be managed solely by PGN. As for the terminal in West Java, PGN and Pertamina will form a joint venture to manage the project.
“For the terminal in West Java, we have completed the pre qualification selection for pipeline procurement,” Pertamina’s investment planning and risk management director Ferrederick ST Siahaan said.
PGN earlier said that the company would import LNG from Qatar and the gas will be supplied through the LNG terminals before being distributed to its customers. The company said the terminals could also be used to receive LNG supply from local producers.