Posts tagged LNG
The Indonesian government is set to re-negotiate some of its LNG sales contracts, looking for deals considered uneconomical or below market price, in order to increase natural gas revenues.
The government hasn’t specified exactly which contracts it will review yet, but is known to have its eye on the Tangguh natural gas at Bintuni Bay in West Papua. The plant is owned by BP, the China National Offshore Oil Corp. and Mitsubishi Corp and CNOOC’s 2002 contract allows the company to buy gas at $2.40 per million British thermal units for 25 years–a much lower price than Indonesia’s two other LNG plants at Arun (Aceh province) and Bontang (East Kalimantan). Those facilities sell gas to Japan at $13-18 per million BTU.
Tangguh’s LNG is also exported to South Korea and California, according to the Jakarta Globe.
The Director General of oil & gas at Indonesia’s Energy Ministry, Evita Legowo, said the government would “definitely review gas sales prices that are below the economical price,” including sales through pipelines to countries like Malaysia and Singapore. When re-negotiating contracts, the government has been advised to keep in mind other factors that increase costs for producers above the wellhead price, such as distribution.
source & article: The Jakarta Globe
Indonesia will add to its energy infrastructure with three new Liquefied Natural Gas (LNG) terminals due to come onilne in 2012. The terminals, in Jakarta, Belawan (North Sumatra province) and Arun (Aceh province) should help reduce Indonesia’s domestic supply problems.
According to this report, the director general of the Energy and Mineral Resources Ministry, Evita Legowo, said her government also has another terminal planned for Central Java due to begin operations in 2013.
Jakarta’s terminal, which broke ground this week, is a floating terminal which eventually will be able to handle 3 million tons (400 million cubic feet) of LNG per day after starting with 1.5 million tons. It will source 1.175 million tons from the refinery in Bontang, East Kalimantan province for ten years, and is also looking for other sources.
Arun already exists as a supply terminal and will be converted into a storage facility, and will also source LNG from Bontang or Tanggun in Papua province. It will supply energy to local industries such as fertilizer, paper, and power plants. Belawan terminal’s gas will go to PLN, a state-owned power company.
The new terminals are being constructed by PT Nusantara Regas, a joint venture between PT Pertamina and state-owned gas company PT PGN (60%-40% shares respectively). Pertamina will construct the Arun terminal and PGN will look after Belawan.
source & article: DownstreamToday
Japan’s government has requested an increase in energy exports from Indonesia, namely crude oil and Liquefied Natural Gas (LNG), to help Japan deal with severe energy shortages resulting from recent disasters. Already a major consumer of Indonesia’s energy, Japan is in desperate need of more supply to aid reconstruction operations and make up a drastic shortfall in electricity from the loss of nuclear power plants in Fukushima. Most of Japan, including the capital Tokyo, is enduring shortages and scheduled blackouts. Crews at the Fukushima plant are still struggling to keep radioactive fuel from causing a more serious catastrophe.
Indonesia is the world’s third largest LNG exporter (after Qatar and Malaysia) and the world’s largest exporter of thermal coal for power plants. 95% of Indonesia’s LNG comes from Arun in Aceh province and Bontang in East Kalimantan. A spokesman from BPMigas said the Bontang plant currently has excess capacity, with 20 cargoes still unsold, that could be used to satisfy Japan’s increased demand.
Effects on Indonesian nuclear industry
Meanwhile, Indonesia’s own plans to expand its nuclear power capacity have come under scrutiny, given their geographic susceptibility to the kind of earthquake that led to the Japanese situation. A possible location for a new plant, due to come online in 2022, is Bangka Island to the east of Sumatra. National Atomic Energy Agency (Batan) chief Hudi Hastowo said any Indonesian plant would meet international safety criteria and would ‘certainly’ use more sophisticated technology than Japan’s 40 year old plants at Fukushima.
Indonesia’s Nusantara Regas, a 60/40 public-private joint venture set up to develop LNG transportation infrastructure, has chosen Golar LNG to build a 3 million tonnes per year gas receiving terminal near Jakarta.
Nusantara Regas consists of state-owned energy company Pertamina and private gas distributor PT Perusahaan Gas Negara. Nusantara Regas signed a preliminary deal with Total E&P Indonesie (a subsidiary of French energy giant Total) for 1.5 million tonnes of LNG per year for 11 years, to be supplied from Bontang LNG in East Kalimantan. The cost of the whole project is estimated at US$300-400 million, and is due to be commissioned by the end of 2011.
Indonesia is the world’s third largest LNG (liquefied natural gas) exporter after Qatar and Malaysia. It is also trying to increase its domestic consumption of the fuel to overcome its dependence on oil, the local supply of which has diminished in recent years.
source & article: Reuters via Yahoo!
Singapore’s appointed aggregator of Liquefied Natural Gas (LNG) demand, BG Group, is seeking out natural gas demand beyond power generation and has its eyes on petrochemical/refinery, electronics and pharmaceutical plants as potential customers. The company has already signed on a petrochemicals firm and is “in various stages of negotiations” with companies in the other categories, who might use LNG in manufacturing processes or their own cogeneration plants. Some of these companies are already using natural gas to fuel in-house cogeneration plants and already have LNG supply, but may need to find extra sources in future.
BG Group was appointed in 2008 to source and supply up to 3 million tonnes per annum (mtpa) to Singapore for 20 years. Singapore’s six generating companies are expected to sign a deal next week that effectively guarantees them a share of the electricity market in return for their commitment, which will help secure a new $1.5 billion LNG terminal project. BG Group will source most of its LNG from Australia’s Queensland Curtis due to its proximity to Singapore.
source & full article: Business Times Singapore