Govt building mini LPG plant in South Sumatra
Wednesday, January 2 2013 - 08:22 AM WIB
The government is developing a mini plant of liquefied petroleum gas (LPG) in Musi Banyuasin regency of South Sumatera province and is scheduled to sign a sale and purchase agreement (SPA) early this year.
Umi Asngadah, upstream oil and gas business development director at the oil and gas directorate general of the energy and mineral resources ministry, said that for the development of the mini LPG plant the ministry had conducted a land clearing of 3.2 hectares and had secured a basic primary license from the local administration of Musi Banyuasin.
Speaking during a presentation of a 2012 year-end review and 2013 outlook last week, she said that a team is now finalizing a draft for the memorandum of understanding (MoU) on gas supply scheduled to be signed with PT Medco E&P Indonesia. ?We hope to finalize it as soon as possible,? said Umi.
The policy on the conversion of kerosene use to LPG has sharply increased the local demand for LPG from 1.2 million metric tons per year to 5.6 million tons in 2012. The demand increase has also driven up the need for the development of LPG plants.
The LPG can be produced from oil refinery plant or gas plant. The gas-based LPG plants can be developed based on the schemes of upstream or downstream. The plants based on the upstream scheme are usually owned and operated by the production sharing contractors (PSC), while those based on the downstream scheme are owned and operated by companies that have secured the natural gas processing licenses from the government.
A number of LPG plants that have been in operation include those owned by ConocoPhilips (Natuna, 420 MTPA), Hess (Ujung Pangkah, 90 MTPA), PT. Media Karya Sentosa (Gresik, 58 MTPA), PT. Yudhistira Haka Perkasa (Cilamaya, 44 MTPA), PT Wahana insane Nugraha (37 MTPA), PT Badak (Bontang, 1000 MTPA), PT Gasuma Fedreal Indonesia (Tuban, 22 MTPA).
Editing by Benget Besalicto Tnb.