Khatulistiwa to build LNG terminal in Damar island
Wednesday, April 25 2012 - 11:46 PM WIB
A new Indonesian company PT Khatulistiwa Mandala Energy will build this year a liquefied natural gas (LNG) receiving and re-gasification terminal in Damar island, part of the Thousands islands, around 36 kilometer north of Jakarta, to meet the rising demand for gas in Java.
?We?re now in serious discussions with a foreign investor from the Middle East to finance the development of the LNG facility. Hopefully, we can start construction later this year. Once in operation, our receiving terminal will have a capacity to supply up to 500 mmscfd to West Java, particularly Greater Jakarta,? PT Khatulistiwa Mandala Energy Chief Executive Officer Ari Rahim told Petromindo.Com in Bali on Wednesday.
He refused to identify the investor. But he said that the investor was very interested to invest in the development of the gas facility which would take around two years to develop.
He said that despite the fact that the West Java floating storage and re-gasification unit (FSRU) would have been operational in full capacity then, the West Java region would still see a shortage of gas supply.
According to him, the demand for gas in Greater Jakarta, Banten and West Java provinces is around 2,600 mmscfd - consisting of 1,100 mmscfd from state utility PT PLN DKI, 500 mmscfd from PT PLN Bekasi, 500 mmscfd from industrial estate In West Java, and 500 mmscfd from industrial estate in Banten.
Gas supply available so far for the regions only amounted to 800 mmscfd. ?That means there is unfulfilled demand of 1,800 mmscfd. And I think even when our receiving terminal start operation, the regions? gas market could not be fully met, as our capacity will only be 500 mmscfd,? he said.
He said that the demand would increase as more industries would be established in the regions, while PLN would need more gas for improving its fuel mix away from expensive diesel fuel in its existing power plants and for its new generation of electricity to meet the rising demand of electricity.
On LNG supply, he noted that if his company could not secure it from domestic market then it will have to import. ?If there is no gas supply from domestic source, then we will import. Maybe from the Middle East, Australia, or Papua New Guinea. They?ve come to us offering their gas,? he said.
Editing by David Mustakim