Pacific Oil obtains approval to produce LNG and LPG in Bontang

PT Pacific Oil and Gas, a joint venture between local and Hong Kong-based companies, have received approval from the Investment Coordinating Board (BKPM) to build a gas liquefaction plant in Bontang, East Kalimantan, Bisnis Indonesia reported on Friday.

The company will spend about US$900 million to build the plant, which will produce liquefied natural gas (LNG) and liquefied petroleum gas (LPG). Of the total investment funds, about 247.5 million will come from its own funds.

The plant which will employ 16 expatriates and 1,007 local workers, will have production capacity of five million tons of LNG and 250,000 tons of LPG a year.

The government is seeking new incentives to encourage private companies to enter the country?s oil and gas downstream industry in efforts to help cope with the surge in the domestic demand.

The country?s existing refinery plants have the capacity to produce about 750,000 barrels of fuel per day, far lower than the domestic demand which reaches about 1.23 million barrels per day. Pertamina has to import to meet the shortage of the local fuel production. (*)