Arun commissioning marks uptick in Indonesian LNG demand

The impending spot arrival of the 146,000 cubic metre (cbm) Tangguh Towuti at Indonesia’s newly converted import terminal at Arun will mark the start up of the country’s third import terminal, raising its overall regasification capacity to just over 9mtpa.

The conversion of the Arun liquefaction plant to a regasfication terminal adds 400 million cubic feet (mcf)/day or 3mtpa to an existing 6mtpa of receiving capacity from two floating terminals.

The government has allocated 54 cargoes from the country’s LNG production for the domestic market this year, according to a spokesperson from Indonesia’s energy regulator, SKK Migas. This would equate to 17-18% of Indonesia’s expected 2015 LNG production and less than half the country’s regasification capacity.

State-owned electricity provider Perusahaan Listrik Negara (PLN) is expected to be the recipient of most 2015 volumes. In West Java, it has contracted to receive around 26 cargoes through the Golar-operated floating storage regasification unit (FSRU) Nusantara Regas Satu. In southern Sumatra, it has been allocated four to seven cargoes through the Hoegh-operated PGN FSRU Lampung – down from earlier expectations of 12 cargoes. And in Arun in northern Sumatra, it expects 14 to 16 cargoes via its 1.5mtpa, 18-year agreement with Tangguh LNG offtaker BP.

Over the next 10 years, national electricity demand is expected to grow at around 9%/year. PLN forecasts downstream electricity consumption will hit 227TWh in 2015, and up to 387TWh in by 2022.

Regasified LNG from Arun will be used for power generation and by fertiliser companies and other industries in Nanggroe Aceh Darussalam as well as the North Sumatra provinces.

Aside from the BP volumes from Indonesia’s Tangguh production plant, state-owned oil and gas producer Pertamina has also allocated Bontang volumes for domestic trade. Pertamina is currently understood to be marketing up to 20-25 excess Bontang cargoes to the international market but is considering increasing deliveries to domestic terminals. However, while the number of cargoes currently expected to discharge at Indonesian terminals over 2015 would be well below receiving capacity, there is still some uncertainty with regards to the downstream infrastructure to absorb any extra volumes.

Ship aims for domestic LNG trade

New York-listed shipowner Golar LNG has completed the sale and delivery of a 2005-built steam-turbine LNG carrier – the 140,000cbm Golar Viking – to Indonesia focused shipowner Equinox for $135m, it said on 16 February.

The vessel, which has been renamed Salju and will fly under the Indonesian flag is “well suited for the short-haul nature of the domestic Indonesian trade,” Golar said, adding that it fits “Equinox’s aim of actively servicing Indonesian domestic LNG shipping demand.”

Pertamina has been assessing charter options of between three-to-five years for domestic LNG transport for some time.

The producer, which has allocated a larger portion of its LNG production in 2015 for Indonesia’s regasification terminals is also the majority shareholder in the charter of the Nusantara Regas Satu.

The FSRU is owned and operated by Golar Indonesia, a joint venture between Golar and Equinox’s parent company. Ludovic Aldersley