Minister questions ability of local firms to buy Donggi Senoro gas
Thursday, August 20 2009 - 02:43 AM WIB
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that local potential buyers invited to the meeting among others are PT Perusahaan Listrik Negara (PLN), PT Perusahaan Gas Negara (PGN), and fertilizer firms.
Purnomo said the meeting aimed to discuss Indonesia?s readiness to buy LNG from the proposed plant and to find financing for the project
Financing is especially important, he said, because the lead consortium partner of the project, Japan?s Mitsubishi, would likely withdraw from the project if the government decided that domestic buyers would get all get the gas.
Mitsubishi is expected to arrange financing for the project.
?The total costs for both the upstream and downstream developments) will rise to US$2.5 billion (from the original $1.4 billion) if domestic buyers buy the project?s gas ... and Mitsubishi decides to discontinue involvement in the project,? Purnomo said. He did not give a reason for the increase in the costs.
State owned oil and gas firm Pertamina holds a 29 percent participating stake in PT Doggi Senoro LNG, while PT Medco Energi Internasional holds 20 percent and Mitsubishi holds a controlling 51 percent share.
The consortium signed last February a Heads of Agreement (HoA) with Japan's Kansai Electric Power Co. Inc and Chubu Power Co. Inc, stipulating that each of them would be supplied with one million ton of LNG per annum from the plant for 12 years, starting end of 2012.
However, the contracts and project are in a state of limbo as Vice President Jusuf Kalla announced in mid June that gas from the Senoro and Matindok fields should be should domestically.
Kansai Electric has announced that it canceled plan to buy LNG from the project with Chubu expected to follow suit. (godang)