Indonesia is Southeast Asia’s biggest gas supplier, with exports accounting for around 45% of its production as well as being the seventh-largest exporter of LNG globally. However, as gas demand rises in Indonesia the country is looking to lock in more global LNG import deals.
Texas LNG is a LNG facility to be constructed at the Port of Brownsville, South Texas, close to the US-Mexico border. With plans to reach Final Investment Decision in 2018, the facility is seeking to export LNG by 2022.
Talking at the upcoming Gas Indonesia Summit & Exhibition in July, Vivek Chandra, Chief Executive Officer of Texas LNG spoke with Gastech Insights to discuss the upcoming project and to share what role it has in the advancement of the Indonesian gas industry.
Gastech Insights: What is Texas LNG’s role in Indonesia’s gas sector?
Vivek Chandra: Indonesia is a key focus market for Texas LNG. We are in advanced negotiations with one of the key players in the Indonesia LNG sector, and have had additional meetings with a number of government and private entities seeking to procure LNG supply from low-cost suppliers, such as Texas LNG.
Indonesia is a long-term player in the LNG industry, but is relatively new as a LNG buyer from international markets. Thus, in addition to the larger supply deals already executed with US and other players, Indonesia should look to signing smaller and more flexible deals to diversify its supply options.
Indonesia should also look beyond its immediate neighborhood for LNG suppliers. Domestic production from its large LNG plants such as Bontang is dropping, Australia may be an unreliable supplier due to domestic issues, and Middle East suppliers such as Qatar are focusing their efforts to other markets. Thus, the US Gulf Coast is a good source of LNG for Indonesia's growing requirements.
Gastech Insights: How can the US help Indonesia advance the country’s challenging gas and LNG industry?
Vivek Chandra: An LNG supply relationship with US suppliers will be mutually beneficial. Indonesia will gain flexible and low-cost LNG, while the US will be able to play an important role in Indonesia's ambitious energy plans.
Gastech Insights: How can the industry reduce costs and drive innovation in Indonesia?
Vivek Chandra: Indonesia has been burdened by bureaucracy and corruption that limits the role that private and state owned entities want to play. This has to change urgently if plans to secure 35 MW of new power supply are to be met. I think the government has recognized this weakness, and it trying to improve the situation.
Gastech Insights: What are you most looking forward to at the upcoming Gas Indonesia Summit in July?
Vivek Chandra: Further developing Texas LNG's strong relationships in Indonesia and to better understand reforms that the government is pursuing.
Share your insights and join the conversation: Do you believe US LNG can successfully aid in the advancement of Indonesia’s gas industry? Leave your comments below.
Vivek Chandra is speaking alongside PLN and Wood Mackenzie on “Market Updates on PLN’s 35,000MW Program”at the Gas Indonesia Summit and Exhibition on 13th July at 11:45am at Jakarta Convention Center. To learn more about the event and to book your delegate place, click here.
Image courtesy of Texas LNG
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