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Jakarta Post

LNG import is a cheaper option: Luhut

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, August 22, 2017   /   12:34 pm
LNG import is a cheaper option: Luhut Workers stand on the wharf of a liquefied natural gas (LNG) terminal in Benoa Harbor in Denpasar, Bali. (JP/Zul Trio Anggono)

Coordinating Maritime Minister Luhut Pandjaitan said on Monday that the government would likely prefer to import liquefied natural gas (LNG) to fuel power plants in several locations, because the domestic prices of the commodity is higher than the price offered by Singapore.

“We have two options; either a swap arrangement or import,” he said.

Singapore is offering LNG to Indonesia at the price of US$3.8 per million British thermal units (mmbtu), which is still lower than Indonesia’s average LNG spot price of around $5 per mmbtu.

Read also: Singapore to supply LNG for Indonesia's power plants: Luhut

The two countries will sign a deal in the upcoming 50th anniversary of Indonesia-Singapore bilateral relations, Luhut added.

Previously, the Energy and Mineral Resources Ministry’s directorate general of oil and gas stated that Indonesia did not need to import LNG until 2020.

Luhut, however, said that as a businessman, he believed it was better to spend less in a cheaper option.

“Why should I spend Rp 10 when I can only spend Rp 8?” he said.

Indonesia needs NLG to fuel small power plants in seven locations, including in Nias in North Sumatra, Lhouksemawe in Aceh and in Riau, with capacities between 25 megawatts (MW) and 100 MW.

"The total capacity would reach 500 MW, including 100 MW in Gorontalo, but it would be divided in several remote places,” he said. (dis/bbn)