Economy of Resistance: Production and Job Creation
2017 20 November Fa

Indonesia replacing Saudi LPG with Iran imports

Indonesia is expecting to increase liquefied petroleum gas (LPG) imports from Iran, director general of oil and gas at the South Asian country’s Energy and Mineral Resources Ministry, Wiratmaja Puja, says.  

“We wish to add the amount of imported LPG from Iran. At a discounted price if possible,” Wiratmaja said.

Indonesia’s media reports said the government has been exploring the option since Chief Economic Minister Darmin Nasution’s visited Iran in February.

Wiratmaja said Indonesia wants to double imports of Iranian LPG from 500,000 tonnes to one million tonnes.

However, any deal depends on Iran being open to price discounts which state-owned oil and gas company Pertamina is demanding from the Middle Eastern country, he added.

“On the amount of discount, let Pertamina explain it. I don’t have the capacity to answer,” he said.

Wiratmaja confirmed that increase in LPG imports from would have an impact on the amount of LPG imports from other countries, including Saudi Arabia’s  Aramco.

The minister said Aramco had been notified of the decision during King Salman’s visit to Indonesia as part of his current extravagant tour of Asia.

Wiratmaja declined to reveal Saudi Aramco’s reaction to the potential decrease in LPG import by Indonesia.

Iran has been ramping up crude oil production to win back its market share since sanctions were lifted on the country under a nuclear accord.

The Islamic Republic’s assertive return to the market has undercut Saudi Arabia and other producers in many places.

The kingdom was behind a decision at OPEC to scrap a production ceiling after the West intensified sanctions on the Islamic Republic in 2012. Saudi Arabia and other producers pounced on the occasion to take over Iran’s market share with stepped-up production.

16 / 3 / 2017