No decision yet on relocation of Aceh LNG trains to Irian Jaya

The relocation of two LNG trains from the Arun LNG plant in Aceh to the Tangguh LNG project in Irian Jaya was a mere idea and no decision had been made on the matter, the government and the owner of the Tangguh LNG plant said Wednesday.

Director general of oil and gas at the Ministry of Energy and Mineral Resources Rachmat Sudibyo told Petromindo.Comthat the relocation of the train was still ?a mere idea for discussion?.

He was commenting on the report by business daily Bisnis Indonesia, which was quoted by Petromindo, as saying that the government planned to relocate two of the six LNG trains owned by PT Arun NGL Co to the Tangguh LNG project.

The paper quoted by Rachmat as saying in a seminar on Tuesday that the Aceh people would be given US$100 million in compensation for each relocated train.

He said two of the six LNG trains owned by PT Arun NGL Co had been kept dle for long due to shortages of gas supplies to the company. Arun NGL is co-owned by Pertamina and American energy giant ExxonMobil Corp.

The relocation is aimed to cut the investment costs of the Tangguh LNG project so that it is able to produce cheap LNG and, as such, compete for the LNG supply contract with China.

Indonesia is planning to supply LNG to China, but other countries are also seeking to win the contract.

Price will be a crucial factor to determine the winner of the contract.

The Tangguh LNG is owned by a consortium led by Anglo-American energy firm BP Plc.

BP Indonesia?s vice president for governments and public affairs Satya W. Yudha also said no decision had been made on the relocation of the Arun LNG trains.

?We have first to study if the technology (applied in the Arun LNG plant) is compatible with the front end engineering design to be applied in the Tangguh LNG plant (before deciding on the relocation of the LNG trains),? Satya told reporters on Tuesday. (Godang)