This paper addresses the Tangguh LNG project, Indonesia's new LNG export centre. To place the Tangguh LNG project in context, Indonesia's position as the world's largest LNG exporter is briefly described. The paper then explains how the Tangguh LNG project will enable Indonesia to maintain and expand the level of its LNG exports in the decades ahead. This in turn supports the policies of both the Indonesia government and of the provincial government in Irian Jaya, while supplying clean energy on a competitive basis to LNG importing countries in the Asia-Pacific region.

Indonesian LNG and gas exports Indonesia commenced LNG exports to Japan from Bontang in 1977 and from Arun in 1978. Over the next 20 years the export capacity of both plants was increased progressively to achieve a combined export capacity of over 30 mtpa by 2000. In 1986 and 1990 Indonesia became the first LNG supplier to Korea and to Taiwan respectively, and Indonesia is the largest single supplier of LNG to each of Japan, Korea and Taiwan. The evolution of Indonesia's LNG sales is shown in Figure 1.

Indonesia LNG Sales and Market Share Indonesia LNG Sales and Market Share LNG Sales Asia Pacific Market Share MTPA Oma n(in 2 0 0 0) 2 % 3 0 Taiwan Australia A bu Korea 1 0 % Brune i Dhabi 9 % 2 5 Japan 6% U S A Qatar 2 % 2 0 1 3 % 1 5 1 0 Indonesi a Malaysia 3 7 % 2 1 % 5 7 7 7 9 8 1 8 3 8 5 8 7 8 9 9 1 9 3 0 9 5 9 7 9 9 Yr. 2000 Figure 1: Indonesia LNG Sales & Market Share Today the Bontang LNG plant in East Kalimantan has a capacity of 22 mtpa, and there are sufficient proven reserves to maintain that level of exports well into the 3rd decade of this century. The gas reserves supplying the Arun LNG plant in North Sumatra are however depleting, which makes it BLOCK 3 - - FORUM 17 211


timely to develop Indonesia's 3rd LNG export centre at Tangguh. Physically, Indonesia's 3 export centres are well separated, as shown in Figure 2. The Tangguh LNG project is located in the western part of Irian Jaya province (also known as West Papua), which lies in the eastern part of Indonesian.

Indonesian LNG Indonesian LNG Centres Centres Arun LNG Plant Bontang LNG Plant Tangguh LNG Plant Site Sumatera Irian Jaya Kalimantan Sulawesi Jakarta Surabaya Java 5000 km Figure 2: Indonesian LNG Centres Also of note, Indonesia has recently commenced natural gas supplies to Singapore and Malaysia under long-term pipeline gas supply contracts from the West Natuna offshore gas province, and has signed a second such supply contract with Singapore based on gas from South Sumatra.

Indonesia will thus become Singapore's main supplier of natural gas, primarily for power generation.

In addition to the significant role which natural gas plays in supplying Indonesia's domestic fuel market (notably in West and East Java), Indonesia is therefore contributing very substantially to the sup

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