NATURAL GAS - JAKARTA. Dutch energy giant Shell is eyeing the liquefied natural gas (LPG) market in Indonesia and is in the process of obtaining an import permit, an official has said.
Energy and Mineral Resources Ministry Oil and Gas Director General Djoko Siswanto said on Tuesday that Shell was preparing facilities like storage and regasification in Indonesia as well as cargo ships.
“Shell has informed me that it already has consumers in Indonesia,” he said, adding that the ministry would call upon the company soon to present its business plan.
LNG is a derivative product from natural gas that has been transformed into a liquid for distribution. However, unlike liquefied petroleum gas (LPG) that is a ready-to-use product, LNG needs to be transformed again into gas once its arrives at the buyers’ premises.
Therefore, the use of LNG requires regasification facilities. LNG is considered the answer to meeting the gas demand if the gas pipe network proves insufficient.
Djoko did not disclose the amount shell would import and the location of the regasification facility. “We have no clear information about it yet. But we expect to hold a meeting with them this month,” he added.
Similar information was circulated by the Industry Ministry, last month. Shell will reportedly build an LNG facility worth US$400 million in Cilegon, Banten.
In 2017, Fitch Group's BMI Research estimated that Indonesia’s gas demand would grow 4 percent annually in the next decade, with power generation the largest consumer. Indonesia is estimated to become an LNG net importer by 2022.
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