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Indonesia mulls LNG swap deal with Singaporean firms

Marchio Irfan Gorbiano (The Jakarta Post)
Jakarta
Wed, September 6, 2017

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Indonesia mulls LNG swap deal with Singaporean firms Workers stand on the wharf of a liquefied natural gas (LNG) terminal in Benoa Harbor in Denpasar, Bali, recently. (JP/Zul Trio Anggono)

T

he government is considering a swap deal for liquefied natural gas (LNG) with Singapore-based firm Keppel Offshore and Marine to fuel power plants in several areas.

"There is a possibility of a swap [deal] for LNG. We will assess the cost. If it’s cheaper, we will consider [the offer]," Coordinating Maritime Affairs Minister Luhut Pandjaitan said on Tuesday.

Under the arrangement, the firm would offer to supply LNG to Indonesia at a price of US$3.8 per mmbtu, said the minister, adding that the price includes other benefits, such as storage facilities.

Previously, he said that the government would buy LNG from the company to fuel several power plants, including those in Nias, North Sumatra and Lhoksemauwe, Aceh.

Read also: LNG import is a cheaper option: Luhut

If it is signed, the swap deal would encourage domestic LNG suppliers to become more competitive, Luhut added.

However, state-owned electricity company PLN procurement director Supangkat Iwan Santoso said Keppel only offered to rent out its storage facilities to store LNG from Indonesia. “Singapore has gas storage facilities. They can use small vessels to deliver [the LNG],” said Supangkat on Tuesday.

Meanwhile, PLN oil and gas head Chairani Rachmatullah said the offer was due to the country’s proximity to Tanjung Pinang, Riau Islands. “It says using its storage facilities will drive the cost down,” said Chairani.

Supangkat said PLN was studying the offer, as the firm was planning to build power plants with a combined capacity of 240 megawatts in Tanjung Pinang and Natuna, Riau Islands. (bbn)

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