Asian Development Bank extends financial hand to Indonesia so the country can better meet its growing demand for energy. Photo by Stephen Shaver/UPI | License Photo
JAKARTA, Dec. 16 (UPI) -- A $400 million loan is aimed at helping Indonesia, until recently a member of OPEC, meet its growing demand for energy, the Asian Development Bank said.
A net oil importer, Indonesia was suspended last month from OPEC less than a year after rejoining the production group. The suspension came as member states negotiated over an agreement to trim overall production starting in January. Libya and Nigeria were the only two member states exempt from the deal and Iran was allowed increases as it works to regain a market share lost to sanctions.
The ADB said its loan would help expand the Tangguh liquefied natural gas facility in Indonesia so the country was in a better position to meet its energy needs.
"Expanding the Tangguh LNG facility is crucial for Indonesia to meet its increasing energy demand," Christopher Thieme, a deputy director General for the ADB," said in a statement. "The project will also support the country's goal of developing a more sustainable energy mix in a continuous effort to achieve energy security while reducing carbon emissions."
Southeast Asian energy demand is expected to soar by more than 80 percent through 2035.
Indonesian natural gas production increased more than 20 percent in the decade ending in 2012. A country profile from PricewaterhouseCoopers, however, found that since Indonesia started to steer its gas reserves toward the domestic market in 2006, it dropped from the top LNG exporter to the No. 5 spot, behind Qatar, Malaysia, Australia and Nigeria.
The Tangguh facility has been in service since 2009 and is one of the largest in Indonesia. The ADB loan will help finance additional infrastructure to produce LNG in order to increase its capacity. The new operation should be in service by 2020.
Italian energy company Eni signed last year what it said was a groundbreaking deal to sell LNG from a deepwater Indonesian field.
The country exports about half its natural gas and remains one of the largest exporters of liquefied natural gas in the world.