Donggi Senoro LNG partnership to sign HoA
Tuesday, August 26 2008 - 09:02 AM WIB
The agreement would be signed by PT Pertamina Hulu Energi (PHE), IDX-listed energy firm PT Medco Energi Internasional Tbk. and PT Donggi Senoro LNG (DSLNG) for Senoro block and PT Pertamina EP with PT DSLNG for Matindok block, Pertamina's Vice President Director Iin Arifin Takhyan told reporters.
DSLNG, the operator of the LNG plant, comprise Japanese firm Mitsubishi Corp., Medco Energi and PT Pertamina.
Pertamina has a 29 percent stake in the project, with Mitsubishi Corp. and Medco holding 51 percent and 20 percent, respectively.
The partnership plans to set up a 2-MTPA LNG plant. Gas for the proposed plant will be supplied from Matindok Block, which is operated by Pertamina, and Senoro-Toili Block, which is jointly operated by Pertamina and Medco. The LNG plant would be built by Mitsubishi and Pertamina and Medco will sell gas to the LNG plant at well head.
DSNLG will handle all activities related to the LNG project, including studies, financing, design, engineering, development, construction, commissioning. DSLNG will also handle the marketing and delivery of the LNG to be produced from the plant.
The project is estimated to cost US$1.4 billion. The plant is expected to be completed in 2010.
Pertamina has said that Medco EP Indonesia has agreed with Mitsubishi Corp. on pricing formula for gas supply for Donggi LNG plant and the companies are awaiting approval from upstream watchdog BPMIGAS.
?Mitsubishi has agreed to buy gas at well head at a price linked to Japan Cocktail Crude, which, at US$100 per barrel, could reach $10 per MMBTU. We consider this a very good price,? Pertamina Vice President Director Iin Arifin Takhyan told Petromindo.Com on July 7, 2008.
Medco EP President Loekman Mahfoedz said earlier that the LNG partnership will spend up to US$1.4 billion to develop the project. Mitsubishi is currently in talks to sell LNG from Donggi to Japan?s Kansai Electric Power and Tohoku Electric Power. (godang)