tate-owned oil and gas firm Pertamina expects to increase liquefied petroleum gas (LPG) imports from the United States (US) this year following the expansion of the Panama Canal last year.
Around 90 percent of all LPG imports used to come from the Middle East, according to Pertamina’s senior vice president for integrated supply chains (ISC), Daniel S. Purba.
Pertamina aimed to reduce the Middle East share to accommodate more supplies from the US, which would benefit from much shorter delivery and thereby increased competitiveness, enabled by the Panama Canal route, Daniel said, without providing a purchase estimate.
“What is certain, though, is that the LPG imports from the Middle East will definitely decrease, replaced by US LPG. The amount will depend entirely on the market,” Daniel told reporters on the sidelines of the 2017 LPG Indonesia Forum on Tuesday.
Daniel further explained that benchmark prices for LPG in the Middle East and the US were different, as the former relied on prices set by Saudi Aramco, while the US relied on prices traded by Mount Belvieu, which saw its competitive edge in the past hampered by the long shipment period of one and a half months.
Indonesia is highly dependent on LPG imports, as rising consumption cannot be matched by domestic production, which is gradually dwindling.
It imported 4.42 million metric tons of the energy source in 2016, up slightly from 4.3 million in 2015, according to data from the Energy and Mineral Resources Ministry.
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