Arun to stop producing LNG next year

By Godang Sitompul

The Arun LNG plant in Lhokseumawe, Nangroe Aceh Darussalam, will stop producing liquefied natural gas (LNG) in the middle of next year, after around 37 years of production, state owned oil and gas firm PT Pertamina (Persero), the operator of the LNG plant, said on Monday.

Despite the end of LNG production, Pertamina will still operate the facility, not as an LNG plant but as an LNG regasification terminal.

Pertamina?s Gas and Power Director Hari Karyliarto said at preset he LNG plant has only seven cargoes of LNG left that it is obliged to deliver to Korea Gas under contract. Once the contract has been fulfilled in the middle of next year, the plant will no longer have an obligation to produce LNG.

As a consequence, Arun will end the gas purchasing agreements with ExxonMobil-operated North Sumatra Offshore PSC and Block B PSC which now supplies gas to the plant.

On Saturday, Pertamina held a groundbreaking ceremony in Lhokseumawe to launch the project of converting the Arun LNG plant into a regassification plant designed with the capacity of 400 mmscfd or 3 million tons of gas per year.

Hari, who presided over the groundbreaking ceremony, said the regasification plant project is expected to be completed in October 2014.The Arun plant will receive LNG from outside Aceh and turn the LNG into gas before sending the fuel to the Belawan power plant in North Sumatra and industrial consumers in the region.

The gas will be delivered through a 340-km pipeline which is being built by Pertamina. Pertamina will invest US$570 million for the whole projects, including $80 million for the LNG regassfication project.

Editing by Johannes Simbolon