Kansai drops plan to buy C. Sulawesi LNG

Japanese firm Kansai Electric Corporation has canceled plan to buy LNG from the proposed Donggi-Senoro LNG (DSLNG) project in Central Sulawesi.

A source who is involved in the negotiation said that Kansai canceled its plan as it could no longer wait in uncertainty for LNG supply from DSLNG. The HoA which had been extended for two months had expired on July 31, 2009.

The source did not say if other buyer Chubu Electric Power has taken similar step to cancel purchase from DSLNG.

State oil and gas company PT Pertamina is a member of a three-company consortium that established DSLNG, a company set to build and operate the LNG plant. Pertamina holds a 29 percent participating stake in the venture, while PT Medco Energi Internasional holds 20 percent and Japan?s Mitsubishi Corporation holds a controlling 51 percent share.

The consortium signed by the end of February a Head of Agreement (HOA) with Japanese Kansai Electric Power Co. Inc and Chubu Power Co. Inc, stipulating that each company would be supplied one million ton of LNG per annum from the plant for twelve years, starting

However, the contracts and project are in a state of limbo as Vice President Jusuf Kalla announced in mid June that gas from the Senoro and Matindok fields intended to supply the plant, had to be sold domestically instead. (godang)