Publications

The unprecedented rise in the price of oil, high emissions from coal-based generation, continuing concerns on the safety of nuclear energy, and barriers to rapid development of renewable energy generation, are the main causes for the growth in demand for Liquefied Natural Gas (LNG). In the Pacific Basin where Indonesia is located, the balance of power may shift from the buyers to the suppliers in the future as projected demand begins to grow faster than potential supply. Indonesia, as one of the leading LNG exporters, still has enough reserves to be monetized as LNG in the future, especially in Sulawesi, East Papua, and Natuna. These can be used for export to Asian countries as well as supply to an ever-growing domestic market. Timing is crucial for LNG commercialization. This paper discusses prospects for future LNG commercialization in Indonesia within the Pacific Basin. Projected demand up to 2020 and current signed LNG contracts will be considered. By analyzing the subsequent demand gap, we hope to discern appropriate timing for the construction of an LNG plant in Sulawesi and additional LNG trains in Papua. Opportunities to monetize reserves in East Natuna will also be explored. Analysis on projected LNG imports and signed contracts shows a substantial demand gap. This demand gap provides a window of opportunity that should not be overlooked. LNG from Senoro that would be exported to Japan is an example of perfect timing if it can come on-stream in 2012. The Pacific Basin will experience a 40 MTPA demand gap in 2014 if no new contracts are signed, thus providing Tangguh an excellent opportunity to market its LNG from an additional 3 MTPA LNG train. Due to the size of reserves, Indonesia will have to waituntil 2017 for the region to be ready to receive all LNG supply from the Natuna D-Alpha block.Keywords: LNG, Pacific Basin, Indonesia