Indonesia's PLN expects LNG demand to double in 2015 - executive

JAKARTA, April 21 Mon Apr 21, 2014 6:42am EDT

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JAKARTA, April 21 (Reuters) - Indonesian demand for liquefied natural gas (LNG) is expected to double to 56 cargoes in 2015 compared to this year, said a senior official with state electricity utility PT Perusahaan Listrik Negara (PLN) .

Indonesia's domestic gas fields are struggling to keep up with surging power demand in Southeast Asia's largest economy, forcing it to look overseas for supplies.

Thirty-eight of the 56 LNG cargoes needed next year will go to PLN's gas-fired power stations in Jakarta and other West Java cities, PLN oil and gas division chief Suryadi Mardjoeki told Reuters by phone.

The Arun gas project in Aceh, which has been converted into a receiving terminal from an LNG production hub, is expected to take 12 cargoes, while six will sent to Bali and Makassar in South Sulawesi.

PLN has not yet secured commitments for 22 of the additional cargoes it needs to meet the forecast growth in demand next year.

The company hopes the Bontang gas project that processes LNG from the Mahakam field, Indonesia's top gas-producing region, will meet this need when an existing supply contract with a Japanese buyer expires, Mardjoeki said.

"Hopefully we can divert (the gas to PLN) next year," he said, adding that the firm's demand was expected to reach 60 cargoes in 2016.

"In the following years, I don't know where we will get (gas) from."

PLN, which generates the majority of Indonesia's electricity, was in talks with several international LNG producers, Mardjoeki said, but declined to name them.

Indonesia's LNG output was expected to decline steadily until at least 2019, while demand surges by at least 10 percent a year.

State-owned energy firm Pertamina in December signed its first LNG import agreement with U.S.-based Cheniere Energy Inc for 0.8 million tonnes annually from 2018. It is hoping to finalise a second deal to import 1-2 million tonnes of LNG a year from a supplier in Africa or the United States this year. (Writing by Fergus Jensen; Editing by Randy Fabi and Muralikumar Anantharaman)

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