Aceh wants to convert Arun compound into industrial zone

The Aceh provincial administration has proposed for the PT Arun NGL compound to be turned into an industrial zone after the LNG contract with South Korea?s Kogas expires in October 2014, Koran Tempo reported on Wednesday.

?Our demand is for the asset to be transferred. If not utilized, it would become mere iron scrap,? said Aceh Governor Zaini Abdullah.

He said that a number of foreign investors have expressed interest to develop the Arun NGL compound into an industrial zone for petrochemical, plastic, and LNG storage industries.

Ramli Zafar, Head of the Transition Team for the management of Arun asset, said that if Arun is turned into an industrial zone, there will be not much investment required as the existing infrastructure facilities are quite complete such as airport, ship port, and hospital.

The Arun NGL LNG plant started production in 1977. But since 2000, production has been declining in line with declining gas supply from ExxonMobil Oil Indonesia. The government plans to transform the Arun LNG plant into an LNG storage and regasification terminal, which if realized, would be the first in the world. (*)