Iran To Supply LPG To Indonesia

Jakarta (Antara Bali) - Indonesia is planning to import liquefied petroleum gas (LPG) from Iran amid a shortage of LPG supplies in various regions of the country.

The government, through state-owned oil and gas company Pertamina, is expected to import 588 thousand tons of LPG during the 2016-2017 period to reduce the scarcity of gas supplies in several regions.

A number of regions in the country have been running short of LPG supplies since early this month, particularly during and after the post-fasting Eid al-Fitr festivities, or Lebaran. The provinces of Bangkulu, Central Sulawesi, Southeast Sulawesi, and Central Java, among others, also faced LPG shortages. Pertamina will increase its supplies to regions facing LPG shortages.  
    
Legislator Rofi Munawar of Commission VII on energy affairs of the House of Representatives had earlier called on the government to maintain stability in the stocks and prices of LPG and fuel oil during the Lebaran season.

"The government has stated on various occasions that it was ready to face the Lebaran festivities and anticipate any scarcities," Rofi had noted in a press statement on Saturday (July 2).

Amid scarcities, the Energy and Mineral Resources (ESDM) Ministry will prioritize the distribution of subsidized gas in the three-kilogram cylinder category to the household and small and medium-scale enterprises (UMKM) consumers.

"This year, we are offering subsidy to household and UMKM consumers, and others, such as restaurants and hotels, should consume the non-subsidized LPG in the 12-kg cylinder category," I Gusti Nyoman Wiratmaja, the director general of oil and natural gas of the ESDM, stated on Thursday (July 14).

In an effort to overcome the shortage of gas supplies, Pertamina will import gas from Iran. The national Iranian Oil Company will supply 88 thousand tons of gas in 2016 and 500 thousand tons in 2017 to Pertamina.

President Director of Pertamina Dwi Soetjipto said the memorandum of understanding (MoU) on the gas business deal is expected to be inked this month or in August. Both sides will carry out due diligence on oil and gas blocks in Iran.

"The MoU will be signed possibly at the end of this month. After the signing of the MoU, due diligence will be carried out, including evaluations on the (oil and gas) blocks. It will take some four to six months," Dwi was quoted as saying by Merdeka.com online media on Tuesday (July 12.)
    
Dwi said that Pertamina will import crude and LPG from Iran as the prices of the products are lower in that country, with the production cost at only some US$10 per barrel.

"We see that the prices of several products there are relatively lower, such as LPG, crude, condensate, and others. Besides the upstream business, trading could also be developed," the Pertamina president director added. (WDY)