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By Fergus Jensen
JAKARTA, Oct 14 (Reuters) - Indonesia's Arun liquefiednatural gas (LNG) project in Aceh in northern Sumatra hasstopped producing the super-cooled fuel as it switches to beinga receiving and regasification terminal, an official from theplant said on Tuesday.
Indonesia is still one of the world's biggest LNG exporters,but with domestic production slipping the country of 240 millionhas been forced to turn to foreign supplies to keep up withnatural gas demand that is growing around 10 percent a year.
The country's LNG exports have fallen by 40 percent since1999 when it supplied one-third of global consumption, accordingto the U.S. Energy Information Administration. In 2006, theSoutheast Asian country was overtaken by Qatar as the world'slargest LNG exporter.
The Arun plant - majority owned by Pertamina, withExxonMobil and the Japan Indonesia LNG Company alsoholding stakes - had been operating since 1977.
At peak output, Arun had a total of six trains, but due todeclining gas supply, only one of those has been operating inrecent years, Teuku Khaidir, president director of Perta ArunGas, a subsidiary of state energy company Pertamina told an industry conference in Jakarta.
"Four days ago the Arun LNG production switched off andtomorrow is the last cargo to (South) Korea," Khaidir said.
The Arun gas hub conversion is estimated to cost more than$80 million and includes a 3-million-tonne-per-yearregasification unit and alterations to its 600,000-cubic-metreLNG storage facility.
Arun will become Indonesia's first land-based receiving andregasification terminal and is expected to take its first LNGshipments from BP's Tangguh project in eastern Indonesianext year.
Arun will also become the main receiving terminal forIndonesia's first gas imports, which are expected to beginarriving in 2018.
"The LNG hub will become a storage facility to supportnational energy security and also international trading,"Khaidir said.
The gas hub has two tanks that are dedicated for use bythird parties in an open-access system, he said.
The 340-kilometer Arun-Belawan pipeline will take gas fromthe Arun receiving hub to supply industry and power plants inNorth Sumatra. Once this and other gas pipelines are complete,Indonesia's gas demand may increase. (Reporting by Fergus Jensen; Editing by Tom Hogue)
