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Share Price: 503.70
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UPDATE 1-Indonesia is unlikely to begin natural gas imports in 2025 - minister

Wed, 31st Jul 2019 07:13

* A few large gas projects to start production before 2025

* Domestic use to stay at 60% of output in 2025 -regulator

* Pertamina does not expect imports until 2035(Adds Pertamina, PGN comments)

By Wilda Asmarini and Fransiska Nangoy

JAKARTA, July 31 (Reuters) - Indonesian Energy MinisterIgnasius Jonan told reporters on Wednesday the country isunlikely to begin natural gas imports in 2025 as initiallyexpected because some big gas projects will start production,reducing the need for overseas shipments.

The government previously estimated Indonesia will have agas deficit by 2025 and would need to start importing the fuel.

"That was the previous calculation we made beforediscoveries (of new fields)," Jonan said on Wednesday.

Indonesia upstream oil and gas regulator SKK Migas saidprojects such as Sakakemang and the Tangguh Train 3, amongothers, are expected to start operating before 2025.

SKK Migas Chairman Dwi Soetjipto said although he expectsthe volume of domestic gas consumption to increase by 2025, heestimated the portion of domestic use will stay at the currentlevel of 60% of the country's natural gas production in 2025.

"Growth of (domestic) demand is not expected to surge butproduction growth is expected to jump with the start of JambaranTiung Biru and Tangguh Train 3," Soetjipto said.

BP's Tangguh Train 3 project, in the eastern province ofWest Papua, is expected to start production in 2022, he said,with production capacity of around 3.8 million tonnes per year.Pertamina's Jambaran Tiung Biru project in eastern Java willstart in 2021.

The regulator is also maintaining its projection thatChevron's Indonesia Deepwater Development (IDD) project willstart operations in 2024.

Meanwhile, the government has said Repsol's Sakakemang gasproject, which has an estimated 2 trillion cubic feet gasresources, is estimated to come onstream within three years from2019.

Heru Setiawan, a director at Indonesia's state energycompany PT Pertamina, estimated that Indonesia wouldnot require gas imports until 2035 due to the recent largediscoveries.

Meanwhile, Pertamina will use its future import contractsfor trading purposes, Setiawan said.

"We will boost our trading. We have partnerships withtraders overseas such as ENI and Mitsui and we haverepresentative office in Tokyo," he said. "The point is thetrading must be active."

Minister Jonan said that future domestic demand for gas willcontinue to come from the power sector. Indonesia's powergenerators currently have 20% of their energy sourced from gasand it is expected to increase to around 23% by 2025.

Gigih Prakoso, chief executive of state gas utility PTPerusahaan Gas Negara (PGN), said Indonesia needs tobuild more gas infrastructure to boost consumption of naturalgas.

"Currently we only have around 20% of the infrastructureneeded to optimise the usage of natural gas in Indonesia,"Prakoso said.

He said that the government estimated $48.2 billion ofinvestment is needed to fully develop the gas infrastructurenetwork across the archipelago to optimise consumption.

Coal is the country's biggest source of energy forelectricity, providing about 60% of Indonesia's power.(Editing by Christian Schmollinger)

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