Indonesia will cut its liquefied natural gas (LNG) exports by 10 percent in 2006 due to lower production in the aging gas fields in the provinces of Aceh and East Kalimantan, the Jakarta Post reported Saturday.

Buyers in South Korea, China's Taiwan and Japan have agreed to reduce supply from Bontang plant in East Kalimantan by 30 shipments, or about 1.8 million metric tons of LNG, from the ordered 370 shipments, Upstream Oil and Gas Regulatory Agency's deputy of marketing and finance Eddy Purwanto said.

"We are also trying to get nine shipments (of some 580,000 metric tons of LNG) adjusted from the shipments from Arun (in Aceh province)," said Purwanto.

Arun was supposed to export some 75 shipments of LNG, he added.

LNG production was on the decline in the country as reserves in the gas fields, which have been operating for decades, are now becoming depleted.

The government has been trying to reduce or reschedule LNG exports, particularly as fertilizer plants in Aceh have been forced to shut down due to lack of natural gas, a vital raw material for the industry.

Indonesia may only be able to offer as much as 6 million metric tons of LNG per year, barely enough to cover half of its current contract to Japan after its contract expires in 2010, said Purwanto.

"The customers are requesting more shipments, but we won't be able to meet them," he said.

"We are seeing quite a significant decline (in gas supply) while the new reserves discovered are not as big as we expected them to be," Purwanto said.

Indonesia, with gas reserves of 188.34 trillion standard cubic feet, has one of the most extensive reserves in the world.

Source: Xinhua