Exxon to convert LNG plant into gas terminal: Report

Exxon Mobil Corp. will start converting Indonesia?s oldest liquefied natural gas plant into an LNG receiving terminal to supply domestic consumers as export cargoes decline, said the country?s oil and gas regulator, The Jakarta Post reported on Thursday.

Two units at the Arun plant that store LNG meant for exports will be converted into a re-gasification unit to supply local businesses in northern Sumatra, said R. Priyono, head of BPMIGAS. The re-gasification unit will have a capacity of 200 million cubic feet a day, he said. Exxon also plans to build a pipeline to distribute the gas,? Priyono said in an interview in Jakarta today.

The two projects may cost as much as $160 million in total he said. They will be jointly developed by Exxon and PT Pertamina and may be completed next year; according to Priyono.

Arun, in Aceh province, shipped its first LNG cargo in 1978 and will cease exports by 2014 because of declining gas reserves. The plant currently has four LNG storage units. LNG is natural gas chilled to liquid form for transportation by ships to places not connected by pipelines. (*)