The import plans come as Malaysia and India are also stepping up buying while the world’s top LNG importer Japan cranks up gas-fired power plants to make up for lost nuclear generation, and so are likely to stoke already strong prices.

“The president in a cabinet meeting has approved in principle the plan by firms to import gas,” Industry Minister M S Hidayat said, adding that volumes would be determined later.

Commercial firms could import gas from Qatar, Hidayat said.

Indonesia is expected to export 362 LNG cargoes this year, down 15 percent from last year. It is building LNG import terminals with capacity of nearly 10 million tons, as strong economic growth means its domestic industrial demand is rising.

“Net exports could shrink significantly if they are importing LNG,” said Neil Beveridge, senior analyst at Bernstein Research in Hong Kong. “It alludes to a growing gas deficit in Indonesia... which will ultimately lead to even tighter LNG markets.”  

Pertamina is already talking to Qatar as well as Australia over LNG imports to fill a 1.5 million-ton annual shortfall at its planned receiving terminal near Jakarta, its chief said recently.

Qatar will reach full export capacity of the super-cooled gas of 77 million tons per year (tpy) by the end of 2011, the oil marketing company said recently.

Malaysia is the world’s second-biggest exporter, but it is also turning to imports to feed growing local demand.

Indonesia’s state utility firm PLN plans to sign a sales and purchase deal with Malaysian state energy firm Petronas to supply 116 million standard cubic feet per day

(mmscfd) for its Tambak Lorok steam power plant in central Java by 2014, the Investor Daily newspaper quoted Nur Pamudji, the company’s primary energy director, as saying on Monday.

Private industrial gas users could include manufacturing industries such as cement and autos, both having seen rising foreign investment from Asian firms to tap economic growth of more than six percent in the world’s fourth most populous country.

Evita Legowo, the director general for oil and gas at the energy ministry, said the lack of receiving terminals mean such imports from firms are not likely in the near future.

Indonesia’s first LNG receiving terminal, developed by Pertamina and Perusahaan Gas Negara , is expected to begin operating near the capital in the first quarter of 2012.

Industrial gas users pay market rates, but PGN, Indonesia’s largest gas distributor, and PLN face subsidised prices for small individual or business users of gas and electricity.

“It doesn’t matter who does the importing in Indonesia, the price justification must be there. In other words, for imports to happen, the private company must be able to make the

necessary returns — you can’t have a sustained situation where the company imports at high costs but is selling at subsidized prices,” said Erwin Chan of Facts Global Energy in Singapore.