Indonesian energy to be streamlined

INDONESIA is moving to streamline the approval processes for the sale of LNG and gas, according to a government spokesman.

It appears the Indonesian government has realised its energy policy is too restrictive and is taking steps to avoid further hold ups to sales.

Platts reports a special adviser to the Indonesian energy and mines minister and head of the ministry's performance management unit Widhyawan Prawiraatmadja, said that under the current policy several LNG cargoes had failed to load in recent months.

The cargoes had been awarded through tenders from liquefaction terminals operated by state-owned energy company Pertamina.

"We are creating a one-stop service for the approval process," the spokesman said.

"We are going to revise the oil and gas law ... this is why we will have a gas committee, putting together (upstream regulator) SKK Migas, Pertamina, BG and all the production sharing contracts together."

Prawiraatmadja talked about the government's energy policy at the LNG Supplies for Asian Markets conference in Singapore, saying it had already started to take effect.

He also added that "letters of credit" would be required for all commodities in international trade, as directed by the Indonesian trade ministry, to increase transparency.

Responding to industry concerns, Prawiraatmadja said: "We are still having some challenges ... we make decisions sometimes, not always good decisions, and we get feedback.

"We discuss the policy of the government, which was done with a good intention, but it has some damaging impact on our long-term LNG buyers. We'll correct that. If not, we'll just have to learn the hard way."

Indonesia's new energy policy would remove most fuel subsidies and raise about $US25 billion in government revenue, with the funds directed to developing the country's power and gas sectors.

According to Prawiraatmadja, the government wants to focus on domestic power consumption by adding an additional 35 gigawatts of capacity in the next five years - 13GW would be gas generated base load power.

"We are still not very successful in creating access to electricity for all the people," he said.

"There's still about 20% of the total population that don't have access to electricity ... we would like everyone to have the access by the end of this cabinet."

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