Indonesia Focus on Domestic LNG Demand

Indonesia will not be renewing LNG export contracts so it can instead concentrate on meeting domestic demand, according to the nation’s Industry Minister MS Hidayat.

Hidayat was quoted by The Jakarta Post as saying that the government will not extend expired LNG export contracts, instead it will allocate the gas for the domestic market and only export the surplus.

The country’s industrial sector, including production of ceramics, float glass, textiles and chemical products, and the power sector suffer from acute shortage of natural gas.

Three LNG plants – the Arun LNG plant in Aceh, the Badak LNG – will be used to supply the domestic market in the future, according to the industry minister.

Indonesia is building LNG receiving terminals in North Sumatra, West Java and East Java so they can distribute gas from the plants to the domestic market.

A number of LNG export contracts are expected to expire within the next few years, however, the government has no plans to terminate the contracts yet.