Contractors eyeing Senoro LNG plant project

Senoro LNG partnership has listed several international EPC contractors to develop a 2.2MTPA LNG plant in Central Sulawesi, a Pertamina official said.

Vice President Director Iin Arifin Takhyan told reporters on Tuesday that included in the list are Japan?s Sumitomo Corp., Italy?s Saipem and French?s Technip.

Pertamina will have 29 percent stake in senoro LNG plant, with Mitsubishi Corp. and Medco Energy will hold 51 percent and 20 percent stake, respectively.

The plant, which would be built on downstream basis, will get gas supply from Pertamina?s Donggi and Pertamina-Medco-operated Senoro Toil gas blocks. Under the downstream system the LNG plant would buy gas from producers with certain parice formula.

Iin also said negotiation with offtakers Kansai Electric and Tohoku Electric are also progressing. ?We?re currently negotiating about LNG price,? he said, adding that both companies would likely offtake 2MTPA of Senoro?s capacity.

The plant is expected start operations late 2011.

Iin added that gas supply negotiation from Donggi and Senoro-Toili to the plant is also progressing and deal is expected to be closed by the end of the year, along with th JV company formation.

A source involved in the project, however, told Petromindo.Com that it was faced with cost pressure. ?Rising costs has soared investment estimate from US$300-400 per tonne to US$800 per tonne,? the source said, meaning that the investment costs could soar from below $1 billion to $1.6 billion.

?This factor has slowed down Mitsubishi in making investment decision, and has prompted Mitsubishi to ask for lower gas price from Pertamina and Medco,? the source said. (godang)