Govt plans fertilizer and petrochemical plants in Papua
Friday, April 15 2016 - 12:07 AM WIB
The fertilizer plant will use as feedstock gas from the fields which are supposed to supply gas to the third train to be built at the Tangguh LNG plant, while the petrochemical plant will use gas from the Kasuri block, Amien Sunaryadi, Chairman of upstream authority SKK Migas, said during a hearing with the House of Representatives on Tuesday.
Amien said based on certification by Lemigas, the state owned oil and gas reserve appraiser, Tangguh?s Train 3 fields have enough gas reserves to feed the fertilizer plant. ?It is however still an on-paper calculation. The reality will depend on the drilling results,? he said.
As for the petrochemical plant, it is supposed to be supplied with gas from Kasuri, which is operated by Malaysian firm Genting Oil Bhd. It is supposed to be built close to Tangguh Train 3. Last week, Amien said, SKK Migas held a talk with Genting, during which the former asked the latter to find by itself the investors to build the petrochemical plant.
He said there has been a company which is interested to build the plant but the firm set its buying price of the gas at US$3 per mmBtu. ?We consider the price is too low. It will cause losses on the block?s operator (Genting) but provide hefty profit for the petrochemical firm,? Amien said.
Amien did not disclose the name of the petrochemical firm. But previous reports said German firm Ferrostaal is interested to build the petrochemical plant.
In case there are investors willing to build an industrial zone there, the government will propose the industrial zone to be built integrated with the fertilizer and petrochemical plants. The government has thus asked Genting to also consider building a power plant there.
The plan to build the two projects gained support from the House. Kurtubi, a member of the House?s Commission VII which is in charge of energy affairs, said the projects should be well planned so that the government can maximally benefit from them. ?It?s time for eastern Indonesia to become new economic hubs,? he said.
Editing by Johannes Simbolon