In May 2019, Indonesia concluded an 18-year negotiation with Japan’s Inpex Corp over developing a liquefied natural gas (LNG) plant in Masela, which will produce 9.5 million tons of LNG each year.
Indonesia is aiming to double gas production over the next 10 years to 12,300 million cubic feet per day (mmscfd) as it sets sights on becoming one of the top global gas exporters with major projects in the pipeline.
The government’s Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) said in a statement that two developments last year “added optimism” to Indonesia’s goal of becoming a leading gas producer.
He was referring to the resumption of a stalled gas project at the offshore Masela Block and the discovery of a giant gas reserve at the Sakakemang Block in South Sumatra. However, major oil and gas players told The Jakarta Post that SKKMigas was still in talks with stakeholders over how to achieve the target.
Recently, Indonesia concluded an 18-year negotiation with Japan’s Inpex Corp over developing a liquefied natural gas (LNG) plant in Masela, which will produce 9.5 million tons of LNG each year. Four months later, Spain’s Repsol announced the discovery of an estimated 2 trillion cubic feet (tcf) gas reserve in Sakakemang – the third-largest discovery in the Asia-Pacific last year.
SKKMigas head Dwi Soetjipto said in the statement that the gas would be used “to improve the competitiveness of domestic industries and to create an opportunity for Indonesia to once again become a leading LNG supplier to the world”.
Boosting domestic gas production and exports is one of Indonesia’s many strategies to turn around the country’s gaping oil and gas trade deficit that remains a key vulnerability. The deficit reached $1.18 billion in January, up 2.8 times from the previous year, Statistics Indonesia (BPS) data show.
“The vision of 12,300 mmscfd by 2030 is a challenging one, and it will require considerable effort, collaboration and investment on the part of the industry and the government to achieve this,” said Gary Selbie, country manager for Premier Oil Indonesia, the country’s seventh-largest gas producer last year.
He said industry stakeholders had conducted preliminary discussions on meeting the goal. They also planned several meetups in the coming months to create a detailed road map to help achieve the target.
Indonesian Petroleum Association (IPA) executive director Marjolijn “Meity” Wajong told the Post that SKKMigas had not yet engaged with the IPA over the plan but that it would do so in the near future.
“Basically, we welcome the plan to increase production as long as we can figure out how to ensure good project economics,” she said.
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