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Indonesia, the world’s third-biggest exporter of liquefied natural gas, plans to halt exports of the fuel from its Bontang and Arun plants by 2020 to meet domestic demand, according to an Energy Ministry report.

Arun, the country’s oldest LNG plant, will cease exports by 2014 as deposits dwindle, according to Indonesia’s Gas Balance 2010-2025 document.

Bontang will divert its entire supply to domestic buyers, including planned local LNG-receiving facilities, after it stops exports by 2020, said Raden Priyono, head of upstream oil and gas regulator BPMigas.

“We have prioritized domestic demand, since we need more gas to boost this country’s economic growth, increase electricity generation, and increase fertilizer and petrochemical capacity,” Raden said.

The country currently exports LNG from three plants, including BP’s new 7.6 million metric-ton-a-year Tangguh project in Papua, to Japan, South Korea, Taiwan and China under term contracts.

Arun, located in Aceh, and Bontang, in East Kalimantan, produced more than 95 percent of the country’s LNG last year, according to calculations based on official data.

Japan bought a fifth of its LNG supplies from Indonesia last year, according to official data.

Indonesia’s gas output grew 2.7 percent in 2008 while domestic consumption surged 12 percent, according to BP’s Statistical Review of World Energy. 



Bloomberg