BPH Migas: Pertamina must seek permit for Arun LNG gas pipe

By Godang Sitompul

Downstream regulator BPH Migas Chairman Andi Norsaman Someng reminds state oil and gas company PT Pertamina to seek special permit from the regulator if it goes ahead with its plan to build gas pipeline that will link the Arun LNG plant with Belawan town in Medan, North Sumatera.

He said if Pertamina builds the 350 kilometers pipeline to deliver gas, the pipeline is considered as a downstream pipeline. ?Therefore, Pertamina must seek permit to have special right to use the dedicated gas pipeline,? Someng told Petromindo.com.

?As far as I know, Pertamina has yet to ask for permit to use gas pipeline to deliver gas,? he said.

Spokesperson of Pertamina M. Harun said that the company has obtained security assurance from local Aceh government as well as Aceh regional council (DPRD) with regard to the pipeline and Arun LNG plant projects.

Harun admit Pertamina has yet to get permit from the downstream regulator BPH Migas for the pipeline project.

Harun insisted that Pertamina will go ahead with a plan to modify the Arun LNG plant to become a regasification plant facility. For the purpose, Pertamina would need 1.5 million tons per annum of LNG. The company is currently seeking to secure gas supply from Tangguh LNG plant operated by BP Indonesia.

He said Pertamina prefers to secure gas from domestic producers, in particular Tangguh LNG, as the price of LNG in the international market is too high.

?We hope to get LNG from Tangguh. We are approaching them (BP Indonesia). Initially, we would need 1.5 mtpa of gas,? VP Communication Pertamina, M. Harun told Petromindo.com.

?There is small probability (to import) as the LNG international price at present stands at 15 percent above Japan Coctail Crude or around US$16 per mmbtu. It is really high,? Harun said.

PT Pertamina is currently tendering project to revitalize the Arun LNG plant in northern Sumatera into an LNG receiving terminal with storage capacity of 125 MMSCFD. The winner of the tender is scheduled to be announced in April

2012.

Nanang Untung, Senior Vice President (SVP) Gas of PT Pertamina said earlier that the Arun LNG terminal will have larger capacity than the West Java Floating Storage and Regasification Unit (FSRU), and the planned Central Java and Belawan FSRUs because the Arun LNG facility has five tanks. Each tank has capacity to store and process 125 million standard cubic feet per day (mmscfd) of gas, which itself is equal to capacity of one FSRU unit.

Nanang said Pertamina has set aside US$80 million to modify the Arun LNG into an LNG receiving terminal.

Editing by Roffie Kurniawan