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Last month, the government agreed to extend its
exports of liquefied natural gas (LNG) to Japan
beyond the original contract expiry date of
2010/2011. The new contracts are for 3 million
tons of LNG per year (mtpy) over the first five
years and 2 mtpy over the following five years.
Indonesia itself is facing a serious energy crisis.
This is indicated by long queues for kerosene,
LPG shortages, power supply interruptions and
huge energy subsidies. Power generators and
manufacturers are protesting about the shortage
of gas. At the same time, the country is still
recognized as one of the world’s largest
exporters of LNG and coal.

Extending LNG exports while energy security remains uncertain

Friday, April 18, 2008

Oleh : Hanan Nugroho, Jakarta

Last month, the government agreed to extend its
exports of liquefied natural gas (LNG) to Japan
beyond the original contract expiry date of
2010/2011. The new contracts are for 3 million
tons of LNG per year (mtpy) over the first five
years and 2 mtpy over the following five years.
Indonesia itself is facing a serious energy crisis.
This is indicated by long queues for kerosene,
LPG shortages, power supply interruptions and
huge energy subsidies. Power generators and
manufacturers are protesting about the shortage
of gas. At the same time, the country is still
recognized as one of the world’s largest
exporters of LNG and coal.
Do we really need to extend our exports of LNG
to Japan, while the country is having such
problems in providing its own energy security?
The upsurge in oil prices is worrying the
government and parliament, who have had to
make adjustments to the 2008 fiscal budget.
They are also getting anxious about the 2009
budget, having projected energy subsidies for
more than Rp 200 trillion. The government
needs to respond to public concerns openly and
honestly.

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