Indonesia seeks to purchase LNG carriers

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 3 -- Indonesia’s state-owned PT Pertamina said it will open a bidding round to procure ocean-going vessels to be converted into floating LNG-receiving terminals in East and West Java.

“We expect to hold the bidding by the end of February,” said Pertamina Pres. Director Karen Agustiawan. “There are about two or three vessels that meet our criteria, but I cannot disclose that now,” she said.

Regasification facilities would be constructed aboard the vessels once they are ready, Karen said. “The work will take about 9 months,” she said, adding that the floating LNG terminals would require other facilities, including deepwater pipelines.

“The LNG terminals are expected to be in full operation by September,” said Karen, referring to plans of Pertamina to construct two LNG terminals in West and East Java, each able to store 500 MMcf of gas. She said the facilities would cost $200 million each.

Indonesia has no LNG receiving terminal but is seeking supplies of gas and coal to meet rising domestic demand for power and to reduce consumption of oil as its reserves dwindle and production falls.

Karen said Pertamina would invite selected vessel owners to participate in the joint venture operating the terminals. She said Pertamina “must” hold majority interest in the JV because “we don't want the vessels to be leased; we want to own them."

Pertamina and state gas distributor PT Perusahaan Gas Negara have been ordered by the government to construct the LNG-receiving terminals to help state-owned power utility PT Perusahaan Listrik Negara secure gas supply for its power plants.

The proposed bidding for LNG carriers follows an announcement last month that Pertamina plans to buy 12 small-capacity gas tankers at a cost of $333 million this year, with the order expected to be finalized in 2012-13.

Four of the vessels are to carry LPG, two with a capacity of 3,500 cu m and the two with a capacity of 23,000 cu m. Suhartoko, Pertamina’s senior vice-president of shipping, said a tender for the four vessels was already under way, and “will require a total investment of $128 million.”

Suhartoko said Pertamina was waiting for shareholder approval to procure the remaining eight small-capacity tankers, which he estimated would cost a total of $205 million. He said the ships, all to be used in Indonesian waters, would range from 3,500 to 17,500 dwt.

Contact Eric Watkins at hippalus@yahoo.com.

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