Japan backs insurance for Donggi-Senoro LNG project

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 28 -- Japan’s state-run Nippon Export & Investment Insurance plans to provide an insurance policy for JGC Corp. to cover an engineering, procurement, and construction contract that the firm was awarded in January from Indonesia’s Donggi-Senoro LNG project.

The Donggi-Senoro partners made a final investment decision in January on the $2.8 billion project, which is scheduled to come online in second-half 2014, producing 2 million tonnes/year of LNG.

Preliminary agreements to buy the total output of Donggi-Senoro gas have been signed by Chubu Electric Power Co. for 1 million tonnes, Korea Gas Corp. (Kogas) for 700,000 tonnes, and Kyushu Electric Power Co. for 300,000 tonnes.

NEXI’s award to JGC came on the heels of an earlier announcement stating that it would also provide insurance for Mitsubishi Corp. to cover its $1.25 billion investment in the Donggi-Senoro project.

Japan is looking to secure as many alternative sources of energy as possible following the earthquake and tsunami which earlier this year created a disruption in the country’s power supply from nuclear sources.

Reports last week said Donggi-Senoro LNG will receive a propane pre-cooled mixed refrigerant process and MCR main heat exchanger from a partnership between licensor Air Products, Lehigh Valley, Pa., and JGC (OGJ Online, Apr. 20, 2011).

Mitsubishi holds a 45% stake in Donggi-Senoro, Indonesia's state-owned PT Pertamina owns 29%, Kogas has 15%, and PT Medco Energi holds 11%.

Contact Eric Watkins at hippalus@yahoo.com.

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