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Indonesia's Pertamina looks to US for LPG imports
[JAKARTA] Indonesian state energy company Pertamina expects to import liquefied petroleum gas from the United States to meet growing demand, with U.S shipments to Asia set to climb following transport developments like the extension of the Panama Canal.
That comes as South-east Asia's largest economy is expected to look overseas to meet at least 70 per cent of its demand for LPG in 2017, said Daniel Purba, senior vice president of Pertamina's integrated supply chain unit.
"In 2017, as we know with the commencement of operation of canals that can accommodate larger vessels, we expect more LPG from America to enter the Asia Pacific in 2017," Mr Purba said on Tuesday at an industry seminar in Jakarta. "We hope their prices are more attractive, and can compete with our existing suppliers ... So the portion of imports from the Middle East will shrink," Mr Purba added.
He said that Indonesia would import a total of around 5 million tonnes of LPG this year, which would be up around 13 per cent from 2016. LPG, sometimes simply referred to as propane or butane, is used in heaters and cookers.
Around 90 per cent of the country's LPG imports are procured in term contracts, with the rest purchased on a monthly basis to anticipate fluctuations in domestic output, Mr Purba said.
Speaking at the same event, Setyorini Tri Hutami, downstream director at Directorate General of Oil and Gas at the Energy Ministry, said Indonesia's LPG production last year dropped to 2.24 million tonnes from 2.27 million tonnes in 2015.
The bulk of Indonesia's domestic LPG supply comes from the Bontang LNG refinery in East Kalimantan province, on the island of Borneo.
"The main problem of LPG in Indonesia is supply," Pertamina deputy chairman Ahmad Bambang said at the event, adding that there was a trend for the proportion of imports to increase each year.