Medco to develop mini-LNG plant in Simenggaris on ?DSLNG model?
Tuesday, August 4 2015 - 12:53 AM WIB
IDX-listed energy firm PT Medco Energi Internasional Tbk stated that it will develop a mini-LNG plant in Simenggaris PSC under a new scheme, using the Donggi Senoro LNG (DSLNG) plant in Central Sulawesi as a model.
The DSLNG plant is the first project developed under a new scheme in which gas production is separated from gas processing into LNG: The first is considered as upstream activity, while the latter under downstream activity. The new scheme allows for optimization of state revenue since the LNG plant investment is not subject to cost recovery.
"The concept of mini-LNG plant was formulated three years ago. Such plant has small capacity of approximately 30-35 mmscfd. We are waiting for government?s approval for the concept," Medco's President Director Lukman Mahfoedz told Petromindo.com, hoping that the government could soon issue its approval.
He cited that the breakthrough idea applied in DSLNG plant project that was originally initiated by Medco is the monetization of stranded gas. "So, the same can be applied in Simenggaris," he said.
DSLNG shipped its first LNG cargo on Monday during a ceremony attended by President Joko Widodo.
According to Lukman, there must be breakthrough ideas, including those related to commercial aspects, to solve energy problems in Indonesia. And the government needs to support such breakthrough ideas.
He estimated that the construction of mini-LNG project takes about two years. The LNG from the plant will be sold to state electricity firm PT PLN (Persero).
The Simenggaris PSC is located in Tana tidung regency, North Kalimantan province bordering to the Malaysian state of Sabah. The block is operated by JOB Pertamina-Medco E&P Simenggaris (JOB-PMEPS), in which Medco holds 62.5 percent interest and the balance is owned by Pertamina.
Editing by Johannes Simbolon