Indonesia's PLN, Pertamina to build LNG terminal

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 19 -- Indonesia's state-owned power utility PT Perusahaan Listrik Negara (PLN) plans to cooperate with state oil and gas company PT Pertamina and state-controlled gas utility company PT Perusahaan Gas Negara (PGN) to build a $500 million gas-receiving terminal.

"We have agreed to form a consortium to finance and build the terminal," said PLN president director Fahmi Mochtar, adding, "We are still discussing how much each company will contribute to the project."

According to Fahmi, who noted that the facility will be constructed on a 170-hectare area at Bojonegara in Banten Province, said the three firms are still calculating the precise total budget required for the project.

Fahmi said the consortium expects to begin construction of the facility in 2009, with operations to begin in 2013. He said the plot of land belongs to PLN and would serve as the company's equity in the project.

The terminal, which will have a storage capacity of 800 MMscfd of gas, will be used to acquire gas from Pertamina and PGN.

Most of the gas from the terminal will be used by PLN, which earlier said it plans to increase gas consumption next year due to the conversion from fuel oil to gas at two of its largest power plants—Muara Tawar and Tanjung Priok.

PLN said it expects to consume about 258,783 billion btu of gas in 2009, with consumption expected to rise by 25.39% to 324,485 billion btu after the conversion.

The announcement coincided with reports that PLN has set its fuel oil consumption target for 2009 at 7.91 million kl compared to more than 10 million kl this year.

"The drop in fuel oil consumption in 2009 is thanks to the optimum use of gas and the operation of a number of new coal-fired power plants next year," Fahmi told members of the energy, mineral resource, research, and technology commission of the House of Representatives.

PLN's 2009 fuel consumption would consist of 4.59 million kl of high-speed diesel and 3.32 million kl of marine fuel oil, he said, adding that 6.41 million kl of the 2009 fuel consumption would be supplied by Pertamina and the remaining 1.5 million kl by other companies.

Contact Eric Watkins at hippalus@yahoo.com.

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