Indonesia still owes Japan some 80 cargo shipments of LNG worth US$2 billion.

“If we do not fulfil the export of 80 cargoes we have to pay $2 billion to Japan,” the Antara News Agency quoted head of upstream oil and gas regulating body (BPMigas) R Priiyono as saying.

The Bontang refinery currently exports 12 million tonnes of LNG to Japan, South Korea and Taiwanm but has problems in meeting obligations.

Baird Maritime understands that this has mainly been due to lack of feedgas supplies and diversions to meet domestic demands. Compounding the supply disruption are depleting oil resources and a move towards clean energy consumption such as what LNG affords.

Apart from Japan, domestic demands and disputes in LNG price differences with China have also caused tension between Jakarta and Beijing, forcing the former to renegotiate a treaty with China in 2009.

Sammy Lee