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pstream oil and gas regulator BPMigas said a floating liquefied natural gas (LNG) receiving terminal to be built off Belawan in North Sumatra may receive LNG from the Tangguh plant in Papua.

BPMigas head R. Priyono said Wednesday that the planned 140 million standard cubic feet per day (mmscfd) supply would likely be taken from LNG that was previously allocated for US-based Sempra
Energy.

“We may take the allocation that was previously for Sempra, but we haven’t made a deal on the price,”
he said.

Under the contract between the government and Sempra Energy, the government was allowed to divert half of the allocation for the company, around 1.87 million tons per year, to other parties with a diversion fee of 50 US cents per million British thermal units (mmbtu).

Oil giant BP is the operator of the Tangguh LNG plant.

Earlier, the director general for oil and gas at the Energy and Mineral Resources Ministry, Evita Herawati Legowo, said that negotiations on the price of LNG to be sent to the floating storage and re-gasification unit (FSRU) in Belawan currently underway would be completed in the near future.

The construction of the Belawan FSRU is projected to be completed in 2012. The FSRU, which is more popularly called a gas receiving terminal, is owned by state gas distributor PT PGN.

PGN said the Belawan FSRUs would have a total capacity of 1.5 million tons of gas per annum. Between 60 and 70 percent of gas from the receiving terminal will be allocated for state electricity company PT PLN, while the remaining stock will be delivered to industries in North Sumatra.

PGN president director Hendi Priyo Santoso said that the construction of the Belawan LNG terminal was necessary in order to cope with the gas supply shortage in North Sumatra.

“With the presence of the receiving terminal, North Sumatra will have a significant additional supply of gas,” he said as quoted by Kontan.

There are three other LNG terminals being planned in Indonesia to cope with the gas shortage.

PGN and state-owned oil and gas company Pertamina will build one of the three FSRUs in Teluk
Jakarta, in the northern part of the city. One in Central Java will be built by Pertamina and one in Banten by a consortium of gas-using industries.

The consortium said Thursday that it would build a US$200 million FSRU in Banten province to deal with the gas shortage there. The LNG receiving terminal is planned for commercial operation in April of next year.

The Forum for Natural Gas-Using Industries (FIPGB) has requested that the government secure at least 796 mmscfd of gas for industries this year.

However, the government said it could only provide about 538 mmscfd because a large portion of the production had been allocated for export.

Although the country’s law obliges gas producers to sell 25 percent of their production on the domestic market, most gas producers prefer to sell gas on the international market because they can obtain better prices.