Mitsubishi, partners approve FID on $2.8b Donggi-Senoro LNG project

Japanese giant firm Mitsubishi Corporation (MC) announced Monday that the final investment decision (FID) to build Donggi-Senoro LNG plant project in Central Sulawesi has been reached.

Total cost for the construction and operation of a natural gas liquefaction facility is estimated to be approximately US$2.8 billion, MC said in press release statement

The project is operated by PT DSLNG, which is a joint venture between MC (51 percent), Pertamina Energy Services Pte. Ltd. (PES) (29 percent), and PT. Medco LNG Indonesia (MLI) (20 percent). PES is a subsidiary of Indonesia?s state-owned oil and gas company, PT. Pertamina (Persero), and MLI is a wholly owned company of oil, gas energy firm PT. Medco Energi International Tbk.

Beginning in 2014, DSLNG aims to produce and deliver approximately 2 million tonnes of LNG per year, along with associated condensate (approximately 47,000 B/D crude oil equivalent), and has also come to terms with JGC Corporation on the LNG plant?s engineering, procurement and construction (EPC), it said.

DSLNG has also signed the Heads of agreement (HoA) for the LNG sales and purchase agreement (SPA) with Chubu Electric Power Co., Inc. and Kyushu Electric Power Co., Inc. respectively. Negotiations are currently being finalized with Korea Gas Corporation (Kogas).

MC will transfer its shares of DSLNG to a special purpose company (SPC). The SPC will take over some of MLI?s shares as well, bringing its total stake in PT DSLNG to 59.9%. Kogas, the world?s largest LNG buyer, will also be a partner in the SPC with a 25% share, making this project the first joint LNG project between Japan, Korea and Indonesia, and opening up a new era of cooperation in the energy sector for these three nations. (denny)