Indonesian Government Considers Floating LNG Plants

The Mines and Energy Minister of Indonesia, Purnomo Yusgiantoro, said the country has feasibility studies underway for the construction of floating liquefied natural gas (LNG) plants. "The LNG market is changing and competition is tough now and in the future. We have to anticipate for short-term contracts or even spot LNG for the market," Purnomo Yusgiantoro said.

"Therefore, we are now studying building floating LNG plants. Because if we do not (plan ahead) Indonesia will be left behind by other producers," Yusgiantoro added. Rachmat Sudibyo, head of the Indonesian oil watchdog Balak, said Unocal has talked unofficially with Indonesia about the floating LNG plant. "The idea is the plant can be moved to another place if the reserve is finished. The cost is expected to be cheaper than moving the natural gas from deepwater to an onshore plant," Sudibyo said.

Indonesia currently has eight LNG plants in Bontang, East Kalimantan and four in Arun, Aceh province with total capacity of 25 million tons annually. Indonesia has around 160 trillion cubic feet of proven and potential reserves of natural gas. About 55 percent of Indonesia-extracted gas is converted into LNG.