Indonesia sees LNG exports falling 25% this year
FITRI WULANDARI
JAKARTA, Indonesia (Bloomberg) -- Indonesia’s LNG exports may drop by a quarter this year as domestic demand climbs and contracts with several overseas buyers are set to expire.
Indonesia may ship 200 LNG cargoes overseas, compared with 267 cargoes in 2014, Amien Sunaryadi, the head of SKK Migas, the country’s upstream oil and gas regulator, said in an interview in Jakarta. Domestic commitments may rise to 58 cargoes this year, from 31 cargoes in 2014, according to Sunaryadi, who was made the regulator’s head in November.
Indonesia is increasing its reliance on natural gas to meet domestic energy demand as its aging oil fields pump less crude. Gas supply allocated for the domestic market is estimated to rise to 23.4 Tcf this year from 22.7 Tcf in 2014, according to data published by the regulator in December. State-owned energy firm PT Pertamina Persero signed deals with Cheniere Energy Inc. to import as much as 1.52 million metric tons of LNG per year for 20 years starting 2018 to meet domestic needs.
“Our consumption will grow,” Sunaryadi said. “That will increase gas allocation for domestic use and cut allocation for exports.”
The regulator also won’t extend LNG export contracts that expire this year, he said.
A former member of the Organization of Petroleum Exporting Countries, Indonesia sought target in 2012 to restore output to 1 MMbopd by 2014. That target will be difficult to meet as output from new projects isn’t enough to stem declines from aging fields, Sunaryadi said.
“We need to explore first to find oil,” he said. “Our exploration hasn’t been aggressive in the past years.”
Oil Production
The country’s crude production has fallen more than 50% since the mid-1990s as shifting regulations and complicated permits discourage investments in new fields.
Indonesia targets production of 849,000 bopd this year, Sunaryadi said. The country pumped 794,000 bopd in 2014, according to the regulator’s data.
The regulator also plans to terminate contracts for 41 blocks that are in exploration stage this year, Sunaryadi said. Contracts will be terminated for companies that have failed to meet performance targets, haven’t found oil or gas or with expiring contracts, he said.
