EWC confirms delays, expects Sengkang LNG plant to start production this year

ASX-listed Energy World Corporation (EWC) confirmed there have been some delays in the development of its Sengkang LNG plant project in South Sulawesi, thus postponing its on-stream schedule from the initial plan of 2015 to this year.

?We had experienced some delays in the project development timetable due to the time delay in gas allocation and the subsequent impact on the time to close on the project financing for the transaction, which also requires us to secure on offtake for the LNG,? EWC said in a statement Tuesday.

The gas allocation for the Wasambo gas to be utilised for the Sengkang LNG Project was granted on 20 October 2015.

?Recently, good progress has been made for the initial LNG offtake discussion which are ongoing with PLN, and when these have been concluded, we can close out our project financing discussions,? the company said.

?Subject to these events, we anticipate to complete the construction of the first train and associated works and undertake commissioning and commence operations within this calendar year ending 31 December 2016,? it added.

EWC said in March of last year it expected to complete and commission the first train of the Sengkang LNG project in South Sulawesi during the year.

This portal reported in January of this year, quoting a source who had visited the project site late last year, that the Sengkang LNG plant was expected to come onstream in mid-2016.

Elsewhere, EWC said in the Tuesday statement that if the development of gas resources justifies (which is not known at the present time), it envisages expanding the capacity of the Sengkang LNG Project up to 5 MTPA through a phased development of additional 0.5MTPA modular LNG trains in the long term.

EWC said this project is now well advanced with key equipment, including four cold-boxes, compressors and ancillary equipment already installed on site. The LNG storage tank has been fully slipformed and is now subject to fit out. Jetty works have been finalised and loading arms have been installed. The interconnecting pipework and the installation of the control and instrumentation systems are being completed.

The company is developing the Sengkang LNG Project on the South Sulawesi coastline, in the same region as its Sengkang Contract Area and Sengkang Combined Cycle Power Plant, to monetise additional gas reserves and contingent resources in the Sengkang Contract Area in excess of the fuel requirement for the Sengkang Combined Cycle Power Plant. The project consists initially of (i) one modular LNG train with a capacity of 0.5MTPA, with the three additional trains, depending on gas field development, for a potential total LNG capacity of 2MTPA, (ii) an LNG storage facility and (iii) an LNG loading facility.

Editing by Reiner Simanjuntak