Badak LNG to build coal steam plant to make room for more LNG export

East Kalimantan LNG producer PT Badak NGL, or popularly known as Bontang LNG plant, plans to build coal-fired power plant to reduce the plant?s use of natural gas to generate electricity.

Company president Yogi Suprapto said Thursday the plant would be tendered to interested investors soon with a view to commence operations in 2009.

He said under the tender scheme, Badak would purchase steam produced by the winning investor. tender for steam plant could be opened this month, he said.

The use of coal steam will allow Badak to convert the equivalent of 21 cargoes of LNG it currently burns for electricity, or equivalent to 300MMCFD into export.

Indonesia, the world's biggest exporter of LNG, has failed to meet commitments to buyers in Taiwan, Japan and South Korea amid a drop in gas production.

Earlier, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that the conversion plant would cost US$600 million.

Bontang is suffering from acute gas supply shortage, forcing it reduce LNG shipments to Japan, South Korea and Taiwan. Bontang is seen to miss 52 cargoes of LNG shipment this year, out of 365 cargoes of contractual obligation.

East Kalimantan a coal rich province, home of Indonesia's big producers such as Kaltim Prima Coal, Berau Coal, Kideco Jaya Agung and Gunung Bayan.(godang)