ICIS: 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. MORE