Perusahaan Gas Negara (PGN) PGAS, a unit of Indonesian state-owned oil and gas company Pertamina, said it will buy some LNG cargoes that were contracted for export to meet domestic demand, the company’s chief executive said on Wednesday.

The move involves cargoes from the Tangguh, Bontang and Donggi-Senoro projects, PGN Chief Executive Arief Setiawan Handoko told a parliamentary hearing.

Indonesia, the world’s seventh-largest LNG exporter, is trying to buy back some LNG from its export contracts to support domestic demand, the country’s upstream oil and gas regulator SKK Migas said in January.

“The LNG cargoes allocated to us were the cancellation of committed exports. For example, Tangguh contracts with foreign buyers were reduced to meet domestic demand,” PGN’s Handoko said.

The measure was taken because existing supplies from PGN’s main sources, including Corridor Block, were expected to decline sharply this year as fields mature, he said.

“Of course this would increase the price,” he added.

Indonesia exported 12.77 million metric tons of LNG last year, according to Kpler data, compared to more than 23 million tons in 2010.

The Tangguh, Bontang and Donggi-Senoro projects supply LNG on a long-term basis to major Japanese, Korean and Chinese companies such as China National Offshore Oil Corporation (CNOOC), JERA and Korea Gas Corporation (Kogas).
Source: Reuters