Govt to speed up LNG Arun modification plan

State owned oil and gas company PT Pertamina strongly supports the government?s decision to speed up the program related to the modification of the liquefied natural gas (LNG) Arun plant in Aceh into an LNG receiving and regasification terminal to meet gas needs in Aceh and North Sumatra which is expected to reach 420 million standard cubic feet per day (mmscfd) in 2018.

Pertamina?s vice president for corporate communication, Mochamad Harun, said that in line with the government?s policy the state oil and gas company would also speed up the implementation of the modification project which would absorb investment of about US$80 million, excluding the cost for the construction of a pipeline to be built between Arun and Belawan.

?The project on the conversion program of the LNG Arun plant into a receiving terminal and the construction of the Arun-Belawan pipeline could be completed faster because Pertamina and a local government owned company have agreed to cooperate in the project,? Harun said.

The LNG plant, which will no longer be able to operate in next few years due to lack of gas supply, will be modified into an LNG receiving terminal to maintain gas supply to local industries such as fertilizer producers PT Pupuk Iskandar Muda and PT ASEAN Aceh Fertilizer and paper factory PT Kertas Kraft Aceh.

The Arun receiving terminal is also designed to provide gas supply to PLN?s power plants and other industries in Medan. The terminal will have an initial capacity of 200 mmscfd which can be upgraded to 320 mmscfd. The investment is expected to reach $73 million in capital expenditure and $4 million in operational expenditure.

Pertamina said that the cost would be less expensive than building a new LNG receiving regasification terminal, or hiring third party?s LNG receiving facilities.

Editing by Roffie Kurniawan