RI may import LNG to meet gas demand from 2025

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RI may import LNG to meet gas demand from 2025

Indonesia may have to make LNG import to meet domestic gas demand starting 2025 unless new gas field development projects can be accelerated to provide new supply.

This was revealed by Deputy Minister of Energy and Mineral Resources Arcandra Tahar at the opening of Gas Indonesia Summit and Exhibition in Jakarta on Wednesday.

He said that based on the government’s new natural gas balance, which provides gas supply and demand projection in the period of 2018-2027, existing domestic sources can fulfill the entire domestic gas demand through 2024. The ministry is expected to soon launch the new gas balance.

Arcandra said that new gas supply will be needed starting 2025, but it does not necessarily mean import as it can be fulfilled by accelerating the development new gas field projects such as the East Natuna block.

“Nationally, domestic demand can be fulfilled through 2024 … But additional supply will be needed in 2025. This does not necessarily mean import, but can be fulfilled from new gas reserves or acceleration of the East Natuna field development,” he said as quoted by the statement.

State-owned oil and gas firm PT Pertamina has been assigned to lead a consortium to develop the East Natuna project in Riau Islands province. The project has suffered various setbacks particularly after members of the consortium including ExxonMobil and PTT Exploration and Production Pcl decided last year to pull out from the project as it is deemed not economically feasible due to the high CO2 content.

Elsehwere, Arcandra explained that under the new gas balance, the government divides gas demand in the country into three scenarios.

In the first scenario, gas demand projection is made based on gas demand during the past five years, excluding demand from government-related programs such as household gas network and transportation.

In the second scenario, demand projection is based on last year’s consumption and growth, and the country’s economic growth target.

In the final scenario, demand project is made based on assumption of maximum capacity of manufacturing plants and economic growth target.

In the first scenario, the entire domestic gas demand can be fulfilled by existing supplies. In fact, there’s surplus of supply in a number of regions until 2027.

In the second and third scenario, there will be gas supply deficit in a number of regions. However, the deficit, such in Central Java can be mitigated through the completion of the Semarang-Gresik gas pipeline project.

“Mitigation for the surplus and deficit will depend on the development of infrastructure (facilities),” he said.

He said that based on the three scenarios, existing domestic sources can fulfil the domestic gas demand through 2024.

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