Medco says no time limit set by Japanese buyers for Donggi-Senoro LNG project
Tuesday, June 23 2009 - 07:19 AM WIB
DSLNG is a company formed by Mitsubishi Corp. (51 percent), Pertamina (29 percent) and Medco (20 percent) to run a proposed 2MTPA LNG project, which will operate as downstream industry with operations seen in 2012-2013.
Medco?s Project Director Lukman Mahfoedz said: ?Chubu electric and Kansai have given unlimited time frame for us to continue dialogue with the government of Indonesia for the DSLNG project, although expecting it to be concluded soon."
He added that the consortium is currently continuing talks with the government, with the hope that the LNG could go to the market in 2013.
"Currently there are many LNG projects around the world that will come (to the market) in 2013. So we'll compete. We'll try to overcome (the lingering problem), the target is still 2013. Otherwise,they will look for LNG from other parties," said Lukman.
On June 11, 2009, Pertamina president director Karen Agustiawan said that Pertamina and Medco expected the government?s approval for the proposed LNG project to be given soon as the head of agreement (HoA) on the supply of gas to Japanese buyers would expire within two weeks time.
The plan to build the LNG plant in Donggi, Central Sulawesi province, to produce LNG for export has been hit by uncertainty after the government said that the natural gas output initially intended to supply the plant would be used instead to meet domestic demand.
Vice President Jusuf Kalla said on June 18, 2009 that gas from the Senoro and Matindok fields in the province must be sold to domestic buyers, referring to local industries that rely heavily on gas for production, particularly local fertilizer producers.
?We cannot export gas overseas, while at the same time our industry faces gas shortages. Independence in energy is critical,? Kalla said as quoted by The Jakarta Post.
Kalla said the decision was final and that it was taken collectively by the government.
?I have reported this to the President and the President has agreed with the decision,? Kalla said.
The three members of the DSLNG consortium agreed in February to sell one million tons of LNG each to Japanese utilities Chubu Electric Power and Kansai Electric. The contracts are supposed to run for 15 years. (bernard)