Nusantara Regas signs HoA to buy gas from Total's Mahakam block

Nusantara Regas, a joint venture between state owned gas distributor PT Perusahaan Gas Negara (PGN) and oil and gas firm PT Pertamina, signed on Tuesday heads of agreement (HoA) to buy natural gas from the contractors of the Mahakam block in East Kalimantan and sell the gas to state owned electricity firm PT Perusahaan Listrik Negara.

The contractors of the Mahakam block Total Indonesie and Inpex Corporation will turn the gas into LNG at the Bontang LNG plant in East Kalimantan and ship the LNG to a Floating Storage & Regasification Unit (FSRU) to be built by Nusantara Gas offshore Jakarta, where the LNG will turn into gas before being delivered to the power plants owned by PLN in West Java.

In the same occasion, Nusantara Regas also signed HoA with PLN as offtaker of the gas.

Under the HoA signed at the Ministry of Energy and Mineral Resources, Total and Inpex will supply a total of 11.75 million metric tons over a period of 2012 and 2022 with investment and operational costs totaling around US$200 million.

Following the HoA, Nusantara Regas can start building the FSRU and the LNG terminal is expected to start operation the fourth quarter of 2011, the ministry said in a statement.

The FSRU that will be built by Nusantara Regas has a capacity of 3 million ton per year or 400 MMSCFD. The facilities aim to ease gas shortage in Jakarta and surrounding areas. (Godang)