Medco, Pertamina to sell C. Sulawesi LNG to Japan

JSX-listed energy firm Medco Energi Internasional Tbk. said on Friday that two Japanese bidders had been shortlisted to have majority stake at the proposed Central Sulawesi LNG plant and said LNG produced from the plant would be sold entirely to Japan.

Medco CEO Hilmi Panigoro in a public expose held Friday declined to name the two companies. He also declined to reveal names of the LNG offtaker(s), saying only that winner will be decided December 2006.

He said that upstream oil and gas authority BPMIGAS had just given greenlight to Pertamina and Medco to export their gas production.

Medco, together with Pertamina, had earlier selected four bidders namely; Mitsui Corp., Mitsubishi Corp., Japan LNG and Australia LNG, which partnered with Osaka Gas to develop the plant.

The Central Sulewesi LNG plant project would be built with capacity of up to 2 million tonnes per annum, with gas supply would come from Pertamina-operated Donggi block, and adjacent Pertamina-Medco-operated Senoro-Toili block. Both blocks. Combined proven and certified gas reserves in both blocks are 2.3TCF.

The plant would be Indonesia?s first downstream LNG project in Indonesia.

Pertamina vice-CEO Iin Arifin Takhyan earlier said costs to develop the LNG plant was estimated at between US$600-700 million and development costs for both Donggi and Senoro-Toili block would reach $300 million. He also said that whoever wins the project would get 60 percent shares and Pertamina and Medco would share the remaining balance.

Medco E&P CEO Loekman Mahfoedz said in October 2006 interview that the LNG plant would adopt net back system, where gas suppliers would be paid in line with LNG price sold by LNG plant.

The plant is slated to become onstream in 2009. (godang)