Medco mulls $150 million loan for Senoro-Toili LNG project

Publicly-listed oil and gas company PT Medco Energi International Tbk will look for a US$150 million loan to finance the development of liquefied natural gas (LNG) project in Senoro-Toili JOB, Central Sulawesi.

The loan will also cover the costs of the development of infrastructure and other facilities.

? In order to finance the project, we are mulling for a loan from both local and foreign banks. We hope, the loan will be disbursed this year so that the project will be realized,? Medco Energi?s company secretary Andy Karamoy told the Investor Daily recently in Singapore.

Andy emphasized that the Senoro-Toili LNG project will need a $300 million investment if it wants to develop the field's reserve into downstream products.

?But Medco wants to focus on upstream business so the money needed for the project would be around $150 million,? Andy added.

Proven reserve at the Senoro gas field, which is owned by Medco and state oil and gas company PT Pertamina, is estimated at 1.5 trillion cubic feet (TCF). Both companies are interested to develop the reserve into LNG in view of the steady rise in the global demand for LNG.

?What is clear is that there is no problem of buyers, they can be either from South Korea and Japan,? he said.

Senoro-Toili project will be expected to begin its commercial operations in between 2008 and 2009.

Pertamina has 50 percent interest in Senoro-Toili Block, with Medco holding the remaining balance. The Senoro field was discovered in 1999. The Senoro gas field?s reserves were certified by international independent consultants Gaffney, Cline and Associates in January 2003.(*)