eState-owned gas distribution company PT Perusahaan Gas Negara Tbk (PGN) plans to import between 1.5 and 2 million tons of liquefied natural gas (LNG) a year from Qatar.

PGN’s vice president for gas supply Gamal Imam Santoso said in Jakarta on Tuesday that the LNG to be imported from Qatar would be supplied to two LNG floating receiving terminals to be located adjacent to North Sumatra and Banten.

Gamal said that PGN, the main distributor of gas in the country, was still waiting for the government’s formal approval to go ahead with the import plan.

“PGN executives, along with government officials will soon go to Qatar to meet the Qatari officials,” he was quoted as saying by detik.com

PGN plans to build two floating LNG terminals, one off North Sumatra and another off Banten, to meet the surge in gas demand in the two provinces.

The North Sumatra terminal will have a storage capacity of 1.5 million tons a year while the one in Banten will have a storage capacity of 3 million tons a year.

Gamal said that the import plan was prepared because the company faced difficulties in getting enough additional gas supply from Indonesian gas fields and production facilities to meet the surging demand from local industries as well as gas-fired power stations.

PGN director for business development Michael Baskoro said that PGN and the Qatari company were currently engaged in intensive negotiations on the planned LNG imports.

“But without the support from the government, it will be difficult to realize the plan because the Qatari company will only sell its gas only if the purchase is backed by the government,” he added.

Director General of Oil and Gas Evita Legowo said that there would be no problem for PGN to import LNG. “If it is needed, why not. It’s fine,” she added. Evita said however that PGN should continue to prioritize the marketing and use of nationally supplied gas.

PGN has also secured supply commitments from the Bontang LNG plant in East Kalimantan for the two LNG terminals. Gamal said the Bontang LNG plant had agreed to supply 11.7 million tons of LNG for 10 years beginning 2012.

Source : The Jakarta Post