Indonesia may not have to import gas at all in the near future as it expects new production to make up for the declining output from various depleted gas fields, as domestic consumption remains modest.
The government previously predicted that the country might need to start importing liquefied natural gas (LNG) in 2019 as domestic demand was projected to skyrocket, especially considering the development of various gas fueled power plants across the country.
Data from state electricity firm PLN indicated that Indonesia’s annual gas demand for power generation would increase 81.2 percent to 2,805 billion British thermal units per day (bbtud) from 2017 to 2026.
On the other hand, Indonesia only produced 6,440 million standard cubic feet per day (mmscfd) of gas in 2016, 4.2 percent less than a year earlier. Previous projections showed that production might keep falling to about 6,000 mmscfd by 2030 because of aging fields and a lack of new discoveries, leading to a shortage of about 4,000 mmscfd, 32 tons of LNG, by then.
“However, we might not need to import gas in 2019, especially as new production from several fields, including the Jangkrik complex, could be higher than expected,” the Energy and Mineral Resources Ministry’s oil and gas director general, IGN Wiratmaja Puja, said on Wednesday. The Jangkrik complex comprising the Jangkrik field and the Jangkrik NorthEast field in the Muara Bakau block in the Makassar Strait has been on stream since late May.
The complex, which is operated by Italian energy firm Eni SpA, is expected to reach a peak production rate of 600 mmscfd by the end of the year, up from the previous estimate of only 450 mmscfd.
Eni has also recently discovered the Marakes field near the Jangkrik complex that is projected to start producing 150 mmscfd of gas by the end of 2018 or early 2019.
“If Train 3 of the Tangguh LNG plant [in West Papua] is able to start operations in 2020, our gas supply will increase once again. If the Masela block [in the Arafura Sea] can also start production in 2026, I guess we don’t need to import gas after that,” Wiratmaja said.
Nonetheless, the government still has to find domestic buyers for all of the country’s LNG. According to the ministry, there were still 53.33 and 33.97 uncommitted LNG containers, each of which holds around 143,000 cubic meters of LNG, for 2017 and 2018, respectively, meaning that there were no buyers for this cargo as of Thursday
Moreover, uncommitted LNG averaged at 132.79 containers per year for the 2018 to 2035 delivery period, most of which came from the LNG Bontang relinery in East Kalimantan.
On the otherhand, Wiratmaja said domestic gas consumption for power generation might not be as high as expected because of Indonesia’s growing appetite for coal-Hred power plants.
PLN’s latest Electricity Procurement Business Plan (RUPTL) states that Indonesia intends to develop enough power plants to generate 77.9 gigawatts (GW) of electricity from 2017 to 2026.
About 40.9 percent of the generated electricity will come from coal fired facilities, 24.1 percent from combined cycle power plants and 7.2 percent from gas-fueled ones. State-owned energy giant Pertamina’s LNG vice president Didik Sasongko Widi shared the same view, saying that coal would still be the cheapest source of energ in the long run.
“The development of gas infrastructure faces a big challenge because of various problems, including ones related to land acquisition and permit issuance,” Didik said on Thursday.
The government has recently released the 2016 to 2030 road map for gas infrastructure development, estimated to have a total investment value of US$48.2 billion, Research and consultancy firm Wood Mackenzie has also estimated that Indonesia would need to build additional regasification infrastructure for LNG with a combined capacity of 25 million tons per annum (mtpa) by 2035.
Wood Mackenzie Asia Pacific senior analyst for gas and power Edi Saputra said that Indonesia did not have to import gas in the near future as there would only be a small gas shortage in 2020 and 2025.
“During the 2020 to 2025 period, many coal-fired power plants from the governments 35 GW program will commence operations, decreasing the LNG demand,” Edi said, adding that PLN would prefer to buy electricity from those plants because of their lower costs.
Jakarta Post, Page-9, Friday, July 14, 2017
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