PLN interested in US LNG imports

SINGAPORE: Indonesian state utility Perusahaan Listrik Negara (PLN) is looking at the possibility of importing natural gas from North America to make up for a shortfall in domestic supply for power generation, a senior executive said on Wednesday.

PLN has hired a local consultant to study the feasibility of buying liquefied natural gas (LNG) from suppliers in the United States, which could start exports as early as 2015 when Cheniere Energy's export terminal comes online.

"The main question is whether the US government will actually allow LNG exports to happen," Chairani Rachmatullah, PLN's senior manager for primary energy planning, told Reuters on the sidelines of an industry conference in Singapore.

U.S lawmakers have questioned whether pending applications for expanded gas exports should be approved, a decision that some worry could lead to higher prices for businesses and utilities. .

PLN is also continuing to consider importing natural gas from Iran, despite the threat of US sanctions.

"We want to find out firstly if it is true that Iran can export LNG, because they currently don't have the infrastructure, and also at what price," said Rachmatullah.

"Of course, we also have to consider the sanctions."

The utility said in August last year it was in talks with Iran to import around 1.5 million tonnes a year of LNG for 10-15 years from 2013.

Iran could export its first LNG cargo in early 2013, if it makes enough money from oil exports to finish the long-awaited project without further delay, Iran LNG president Ali Khayrandish told Reuters last September.

But the US has ramped up sanctions against Iran since the start of the year, banning financial institutions from dealing with its central bank, the main conduit for oil revenues, which has made doing business with Tehran very difficult.

Indonesia is struggling to secure enough gas to meet rising demand for power as the economy continues to expand. Electricity demand is expected to grow by an average of 8.5 percent per year up to 2020, said Rachmatullah.

Around 11 gigawatts (GW) of the country's 41 GW of installed capacity can be fuelled by gas. At full capacity, these gas-fired power plants would require 700 trillion British thermal units (tBtu) of gas a year, but only 286 tBtu was used last year due to insufficient supply, down from 314 tBtu in 2010, she said.