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Indonesia sees declining natural gas production
Publication Date : 04-09-2013
Indonesia, one the world’s largest liquefied natural gas (LNG) exporters, suffered its second largest production decline in the past decade in 2012 as the country shifts to gas to meet its energy demand.
Last year, the country produced 64 million tonnes of oil equivalent of natural gas, or 6.6 per cent lower than the 68.3 million tonnes it booked in 2012, according to BP Plc’s BP Statistical Review of World Energy published in June 2013.
“[Indonesia’s] gas production has declined two years in a row and is back at the level of 2008,” BP’s chief economist Christof Ruhl said in a press briefing in Jakarta on Tuesday.
In 2008, Indonesia produced 62.7 million tonnes of oil equivalent of gas. The gas output surged in 2009 and 2010 to 64.7 million tonnes and 73.8 million tonnes, respectively, only to decline by 7 per cent year-on-year in 2011 to 68.3 million tonnes.
In addition, according to the data, natural gas exports declined by 9 per cent in 2012 as gas production fell faster than consumption. Last
year, the nation consumed 32.2 million tonnes of oil equivalent per natural gas or 4.2 per cent lower than a year earlier.
Most of the LNG produced has been exported to countries such as Japan, in long-term contracts despite domestic needs from local industry sectors as well as from state utility firm PT PLN.
Earlier this year, the country’s upstream oil and gas regulatory task force, SKKMigas, said the country would likely start importing LNG in 2018 to meet the swelling domestic demand.
However, the Energy and Mineral Resources Ministry’s 2013 strategic plan focuses on several key upstream and downstream gas projects, with the goal of making gas the dominant fuel in the country’s energy sector until 2018.
This year alone, the ministry will prioritize three gas projects this year, developed separately by Total E&P Indonesie, ConocoPhillips Indonesia and Pearl Oil.
Total’s project will involve the enhanced development of the South Mahakam field in East Kalimantan, expected to generate 202 million standard cubic feet per day (mmscfd). The gas will be delivered to the nearby Bontang LNG plant.
Another key development is by Pearl Oil, which is expected to pump 50 mmscfd of gas from its Ruby field in Sebuku Island in East Kalimantan.
This gas will be supplied to a fertilizer plant run by state-owned PT Pupuk Kalimantan Timur (PKT) in East Kalimantan.
However, as highlighted by the BP Statistical Review, oil remained the dominant fuel at 45 per cent of total energy consumption in 2012. Indonesia’s oil production declined for seven of the past 10 years and production is down 30 per cent from a decade ago.
Indonesia left the Organization of the Petroleum Exporting Countries (Opec) in 2008 after becoming a net oil importer.
None of the officials of the Energy and Mineral Resources Ministry or the SKKMigas responded The Jakarta Post’s query on the latest reports from BP.