JAKARTA - The Association of Oil and Gas Companies (Aspermigas) assesses that the government's plan to stop gas exports abroad is a difficult decision to make.
According to Aspermigas Secretary General Elan Biantoro, the gas industry in Indonesia is not cheap and easy.
"This is difficult because it requires a large capitalization," said Elan in Energy Corner, Tuesday, August 8.
However, Elan appreciated the government's good intentions in proposing to stop gas exports to be used as much as possible for domestic needs and create multiplier effects for the country's economy. But, he said, the low absorption of gas in the country does not allow Indonesia to stop exporting gas.
"There is a sequence from upstream to downstream. There we have to regulate. Meanwhile, from the beginning until now it has been formed that some of our gas production, with the limitations we have, we need to export and export long-term contracts," explained Elan.
He added that Indonesia's gas production is arguably very large but not balanced with the demands of the Industry, which is currently still centered in western Indonesia.
Meanwhile, with the production of such gas bears, Indonesia also still needs world-class investors to produce kareand ari gas on the capitalization side, domestic companies have not been able to produce gas.
"On the upstream there is exploration and exploitation of production. On the midstream there is an LNG infrastructure which costs less and is financed by investors," he said.
Over time, the industry in Indonesia began to develop and needed gas supply, however, it was still unable to absorb all domestic production.
"From there, Indonesia has little domestic demand but large production, so we export it to Japan, Korea, China and so on," he said.
Previously, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan revealed that the government is trying to stop the export of liquefied natural gas or LNG in the near future.
Regarding this, Luhut admitted that he was still waiting for President Joko Widodo (Jokowi)'s approval.
"If the contract is completed, we will not extend it. That is the point. But we will wait for a meeting with the president," Luhut told reporters, Monday, July 24.
Luhut said this was intended to optimize gas for domestic needs such as petrochemical industries that really needed gas for operations.
Moreover, he said, the fulfillment of gas needs as raw materials is still imported from abroad.
"All of our gas that we can use in industrial downstreaming, why should we export it? So far, we have imported LNG exports again. Why not make them domestically?" Luhut continued.
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