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An official says the government will not terminate existing
gas export contracts, even though the country will experience a gas
deficit of 0.3 billion standard cubic per day (bcf) this year.
Luluk Sumiarso, oil and gas director general at the Energy and Mineral
Resources Ministry, said Monday on the sidelines of a meeting with the
House of Representatives that Indonesia had enough natural gas reserves
to meet both domestic needs and its export contracts.
He was responding to the much-awaited forecasts of the country's
long-term gas supply and needs, known as the "gas balance", which was
presented by the Energy and Mineral Resources Minister Purnomo
Yusgiantoro during the meeting with House members.
Purnomo revealed that the national gas balance for this year, which
describes the gas supply and contractual gas demand position, showed a
supply of 8.4 bcf, and demand amounting to 8.7 bcf.
Among the regions that would suffer a deficit were East Kalimantan,
East Java and North Sumatra.
During the meeting, the government announced a number of moves to deal
with the deficit problem, including giving incentives to operators to
boost production from existing fields, and accelerate the coming
onstream of new fields.
Incentives will also offered for the development of gas fields in the
deep sea, Purnomo added.
"There is no other way but to increase gas production in the near
future," Purnomo said, without going into the details of the proposed
incentives.
The gas balance is drawn up by the government to help determine its
future export policy.
Due to the decline in output, the government has already cut LNG
exports for this year by 19 percent to Japan, South Korea and Taiwan.
This means Indonesia will only ship 19.4 million metric tons of LNG
this year, compared to the initial figure of some 24 million tons.
Last year, declining output made it impossible for the country to
fulfill its export commitments to Japan, forcing the world's second
largest LNG exporter after Australia to purchase additional LNG
supplies from Qatar to make good the difference, and to postpone some
LNG shipments to other foreign buyers.
The latest data from the ministry shows that Indonesia's total gas
reserves stood at 187.1 tcf as of the end of last year, up from 185.8
tscf in 2005.
Last year, Indonesia produced a total of 8.217 bcf, of which about 54
percent was exported, mostly in the form of LNG, with the remaining 46
percent being sold on the domestic market.
The government has set itself the target of increasing gas output by 30
percent by 2009.
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