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Indonesia's Senoro LNG plant startup delayed again

Eric Watkins
Senior Correspondent

LOS ANGELES, Apr. 30 -- Indonesia's planned fourth LNG plant, to be built in Senoro, Central Sulawesi, will begin operations later than expected due to a disagreement over the pricing of gas for the facility.

"We have extended the target for initial production as negotiations on the gas prices have yet to reach an agreement," said Lukman Mahfoedz, president director of Medco E&P. The project partners are Mitsubishi Corp. 51%, state-owned PT Pertamina 29%, and Medco 20%.

Lukman said the Senoro facility is to start production in first quarter 2012, marking the second delay in the project, which was initially expected to go online in 2010 but was delayed until 2011 amid similar price uncertainties. Upstream regulators are still calculating the budget needed to develop the gas fields that will supply the plant.

Project partners will buy gas from two fields in Senoro. The first, on Toili block, is jointly owned by Pertamina and Medco, while the second, on Donggi block, is wholly owned by Pertamina.

Indonesia operates two LNG plants. The Arun LNG plant in Nanggroe Aceh Darussalam has a total capacity of 12.5 million tonnes/year, while the Bontang plant in East Kalimantan has a capacity of 18.5 million tpy.

A third plant in Papua, designed to have capacity of 7.6 million tpy, is due to begin operations under BP PLC by yearend.

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