Indonesia's PGN uses LNG allocated for export to meet domestic demand

The chief executive of Perusahaan Gas Negara, a unit within the state-owned Indonesian oil and gas company Pertamina said that it would buy certain LNG cargoes contracted for export in order to meet domestic demand.

Arief Setiawan Handoko, PGN's Chief Executive, told a parliamentary committee that the move involved cargoes from projects such as Tangguh Bontang, and Donggi Senoro.

Indonesia's oil and gas regulator SKK Migas stated in January that the country, which is the seventh largest LNG exporter in the world, was trying to buy some LNG back from its export contracts, to support the domestic demand.

The LNG cargoes we received were the cancellations of exports committed. Handoko, PGN's Handoko, said that Tangguh contracts were reduced with foreign buyers to meet the domestic demand.

He said that the measure was taken as it was expected that existing supplies, such as Corridor Block from PGN, would decline dramatically this year due to fields maturing.

He added, "Of Course this would Increase the Price."

Kpler data shows that Indonesia exported 12,77 million metric tonnes of LNG in 2010, compared to over 23 million tons the previous year.

The Tangguh and Bontang projects provide LNG to major Japanese and Korean companies, such as China National Offshore Oil Corporation, JERA, and Korea Gas Corporation.

(source: Reuters)