Mitsubish-led LNG project may be shelved

The Japanese-led consortium seeking to build the Senoro LNG plant in Central Sulawesi, Indonesia, may have to delay its plans due to lower reserves of gas in the Senoro and Matindok fields.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 28 -- The Japanese-led consortium seeking to build the Senoro LNG plant in Central Sulawesi, Indonesia, may have to delay its plans due to lower reserves of natural gas in the Senoro and Matindok fields than earlier estimated.

"We are now waiting for the operators to decide whether they still want to develop the project with the lower proven reserve," said Indonesia's Energy and Mineral Resources Minister Purnomo Yusgiantoro, in reference to the consortium comprised of state-owned PT Pertamina (Persero), PT Medco E&P, and Mitsubishi Corp.

Purnomo, who said upstream oil and gas regulator BPMigas also would discuss the matter with the consortium, announced Indonesia's state-owned oil and gas research and development center (Lemigas) had found reserves in the fields to be lower than the consortium's estimate of 2.4 tcf.

The minister did not detail Lemigas' findings, saying the institution "might" publish its results later on. But ministry adviser and former BPMigas chairman Kardaya Warnika said the lower proven gas reserves meant the LNG plant could not meet its initial production target.

"Lower proven gas reserves means less LNG production," said Kardaya. "Thus the plant may not be able to meet its initial production target of 2 million tonnes/year of LNG."

The Senoro LNG project came under public scrutiny when PT LNG Energi Utama (LEU) last August filed a lawsuit against Mitsubishi over claims the Japanese firm had unfairly won the project.

LEU, which claims exclusive rights to be involved in the Senoro LNG project, filed its lawsuit with Indonesia's Business Competition Supervisory Agency, which still has the case under review.

Mitsubishi holds a 51% stake in the Senoro LNG project, while Pertamina holds 29% and Medco E&P holds 20%.

Contact Eric Watkins at hippalus@yahoo.com.

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