Foreign consortium to build LPG plant in South Sumatra

A consortium consisting of state owned oil and gas company Pertamina, Itochu Corporation, Devon Energy, Amerada Hess Corp, and Kerr-McGee Corp, plan to build a liquefied petroleum plant (LGP) in South Sumatra, Kompas reported on Monday.

Itochu?s spokesman Tomayuki Takada told Kompas that the consortium would procure natural gas from the Jabung gas and oil block in the province for the LPG production. "The plant is expected to produce 550,000 tons of LPG and 470,000 tons of light naphtha a year during the initial stage of the operation," he was quoted as saying.

He said that the consortium planned to increase the production to 1 million tons of LPG, and 750,000 tons of naphtha a year in the second year. The entire LNG production from the new plant will be exported to Japan.

He said that the five companies signed the cooperation agreement for the establishment of the LPG plant in March this year. The joint venture, which would manage and operate the LPG plant would be established in August, he added.

Each member of the consortium will have 20 percent stake in the new joint venture which will have an initial capital of about US$100 million. (*)