Indonesia targets increased liquefied gas production, regulator says

Indonesia wants to increase its liquefied gas production by 1 million tons per year in order to reduce the amount of cooking fuel imported, said the head of Indonesia's upstream oil regulator on Tuesday.

The new president Prabowo Subianto has pledged that he will achieve energy independence through biofuels and oil and gas production. He cited the rising geopolitical uncertainty which could affect supply.

Indonesia's Energy Minister aims to double the domestic production of popular cooking fuel LPG from 1.7 million tonnes per year.

Dwi Soetjipton, chairperson of SKK Migas's upstream oil and gas regulator, told reporters that the regulator has identified 15 gasfields which could potentially provide propane and butane to produce 1 million additional tons of LPG each year.

He said that he hoped to reach the goal within three to four year.

In order to boost investment in LPG production, Pertamina, the sole distributor of LPG fuel in the country will be able to offer fair prices for producers.

Dwi stated that investors did not see the LPG industry as economically viable because of Pertamina's low price. "The energy minister wants to improve the situation."

The Energy and Mineral Resources Ministry reported that Indonesia imported 6,9 million tonnes of LPG in 2012, out of 8,7 million tons sold on the domestic market.

Dwi also said that the government is looking at ways to reduce LPG imports by using more compressed natural gases. (Reporting and editing by Christian Schmollinger; Fransiska Nanangoy)

(source: Reuters)