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China, Japan, and Indonesia's LNG Ploys

Published online by Cambridge University Press:  07 May 2025

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2008 was a rollercoaster year for those in the oil and gas industries. In July crude oil prices hit US$147 a barrel in the wake of attacks on Nigerian oil installations, before receding to under US$40 in December after months of economic decline in most major consuming countries. Weaker economies and record high prices have seemingly reduced worldwide demand and burst the speculative bubble in commodity prices. For those in government and business tasked with strategic planning such pricing movements make their jobs extremely challenging. Indeed, despite extensive research by the World Bank, analysts remain unsure if future oil prices will ever again climb above US$100 per barrel.

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Research Article
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This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
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Copyright © The Authors 2009

References

Notes

[1] World Bank, ‘Global Economic Prospects 2009: Commodities at the Crossroads,‘ December 9, 2008

[2] Annika Breidthardt, ‘Indonesian term LNG deal sets new Asian benchmark,‘ Reuters, March 31, 2008

[3] Antara, ‘Japan to buy LNG from Bontang at higher-than-average price,‘ August 20, 2008

[4] Berita, ‘RI Wants 75 LNG Exports To Japan To Be Transported By National Shipping,‘ November 4, 2008

[5] Alfian, ‘Kogas wants to extend LNG supply from RI,‘ Jakarta Post, October 16, 2008

[6] ibid

[7] Antara, ‘Mitsubishi to build LNG refinery in C Sulawesi,‘ June 8, 2008

[8] Jakarta Post, ‘Medco aims to halt oil output decline,‘ May 6, 2008

[9] Reuters, ‘Indonesia says Chubu, Kansai may buy Sulawesi LNG’, January 20, 2009

[10] Ika Krismantari, ‘Japan to buy more LNG from Indonesia,‘ Jakarta Post, August 24, 2007

[11] Reuters, ‘Japan's Inpex due to unveil plans on Timor Sea gas,‘ May 14, 2008

[12] Xinhua, ‘Indonesia Says Inpex Proposes $19.6B LNG Plant,‘ June 9, 2008

[13] Bloomberg, ‘Inpex Seeks Partners for LNG Projects to Raise Funds,‘ December 16, 2008

[14] Xinhua, 2008.

[15] ibid

[16] APS Review Gas Market Trends (2005)

[17] Reuters, ‘Japan's Tohoku Electric buys Indonesia Tangguh LNG,‘ May 20, 2008

[18] Padjar Iswara, Bunga Manggiasih, Amandra Mustika Megarani, Ninin Damayanti and Anton Aprianto, ‘Chasing Tangguh All the Way to China’, Tempo Magazine 02-08, 2008

[19] ibid

[20] ibid

[21] Dow Jones, ‘Indonesia VP: China Understands Need To Seek Gas Price Hike,‘ September 5, 2008

[22] Iswara et al, 2008

[23] ibid

[24] Nowadays an investor's application has to pass through at least five offices, whereas previously an investment license could be obtained through different agencies operating under the same roof.

[25] Katz, James Everett, ‘The Implications of Third World Military Industrialization’, Lexington Books, 1986

[26] Xinhua, ‘China to “seriously consider” building aircraft carrier’, December 23, 2008

[27] Ricklefs, M.C., ‘A History of Modern Indonesia since c. 1300‘, Stanford University Press, 1993

[28] Suryadinata, Leo, ‘Indonesia's Foreign Policy Under Suharto - Aspiring to International Leadership’, Times Academic Press, 1996

[29] Possibly Beijing was goaded by a forceful reaction from Taipei into expressing its outrage over these episodes of anti-Chinese violence.

[30] Suryadinata, 1996

[31] Whilst at the same time vigorously opposing any the US or Japanese military presence where it might impinge on Indonesia's sovereignty, for instance in the Malacca Strait.

[32] Non-conventional oil is that produced or extracted without using the traditional oil well method, and includes the tar sands of Canada and Venezuela's Orinoco heavy oil belt. It is less efficient and more costly than conventional oil production.

[33] International Energy Agency (IEA), ‘World Energy Outlook 2008,‘ November 12, 2008

[34] Iswara et al, 2008

[35] APS Review Gas Market Trends, 2005

[37] Bloomberg, ‘Inpex Seeks Partners for LNG Projects to Raise Funds,‘ December 16, 2008

[38] Daily Telegraph, ‘Vladimir Putin warns “era of cheap gas” is coming to an end’, December 23, 2008