Government has yet to decide on Sengkang LNG buyer

By Bernard Loebs

Although scheduled to commence operation in the next few months, the government has yet to decide on the offtaker for the Sengkang LNG project in South Sulawesi, an official with upstream oil and gas authority SKKMigas said.

?We?re still waiting for the decision from the Minister of Energy and Mineral Resources,? Gas Commercialization Division Head Arief Riyanto told Petromindo.com on Friday.

Arief did not give detail about the Sengkang LNG prospective buyers.

Sengkang LNG project owner Energy World Corporation (EWC) is constructing the first unit of the plant with a capacity of 0.5 MTPA. The company expects to build three more units with similar capacity in the future. The plant is developed under the downstream scheme, meaning that the project?s costs will not be subject to cost recovery.

State electricity firm PT PLN (Persero) in March 2013 signed HoA with EWC, under which the latter firm will supply LNG to PLN?s power plants in Makassar, Bali and East Nusa Tenggara.

PLN?s Head of Fuel and Gas Division said that PLN is waiting for the government?s decision to appoint PLN as the buyer for th Sengkang LNG. He did not say whether it will be feasible to build LNG receiving terminal and regasification facilities in the aforementioned places only within the remaining few months.

EWC is also currently building an LNG receiving terminal in the Philippines, but it?s not clear whether the company will supply LNG from Sengkang to Philippines.

Editing by Alexander Ginting