Indonesia Considers Limiting Gas Exports to Keep Up Local Supply

Tito Summa Siahaan

The government is considering imposing a moratorium on new natural gas exports to guarantee more of the resource for domestic consumption, given the country’s surging demand for energy.

Evita Legowo, the oil and gas director general at the Energy and Mineral Resources Ministry, said the government wanted a change of paradigm on natural gas exploitation.

“We want to start considering natural gas not only as a source of revenue, but also a fuel source to meet our domestic demand,” Evita said on Wednesday.

Indonesia and its growing economy could draw far greater benefits from natural gas by using it as fuel instead of exporting it for quick revenue, she added.

According to resource giant BP’s latest report, Indonesia has been increasing its stash of natural gas, with proven reserves up 67 percent to 3 trillion cubic meters in the 20 years to 2011.

That rate was faster than the world’s 59 percent increase to 208.4 trillion cubic meters during the same period.

Gas production was 75.6 billion cubic meters last year, up 19 percent from 2001, while domestic consumption expanded 22 percent to 37.9 billion cubic meters.

In the interest of using the country’s huge natural gas reserves as a source of fuel at home, the government is carrying out several large projects. These include the construction of the Trans Java pipe project, which is a series of pipelines that extend a total of 682 kilometers at an estimated cost of $1.12 billion, and 33 gas-based fuel stations in Jakarta.

Indonesia also completed work in May on its first floating storage and regasification unit, a massive offshore platform for liquefied natural gas that is expected to supply gas for state oil and gas company Pertamina.

In the proposed state budget for 2013, the government for the first time included gas lifting at around 1.3 million barrels of oil equivalent per day.

The government has been widely criticized for failing to make the most of its vast natural resources.

The country has an abundance of coal, for instance, but most has been shipped overseas while little has been used to fill energy needs at home.