Perta Daya Gas suspends Simenggaris LNG plant project

PT Perta Daya Gas, a joint venture between PT Pertamina Gas and PT Indonesia Power, has suspended the construction of the Simenggaris mini LNG plant in East Kalimantan, reports said on Friday.

Suryadi Mardjoeki, Head of Fuel and Gas Division at state-owned electricity firm PLN, the parent of Indonesia Power, said that the suspension of the project was made because the local Tanah Tidung Regency administration has yet to provide the required permit.

The Simenggaris mini LNG plant was supposed to process 20 mmscfd of gas from the Simenggaris block, which will be supplied to PLN?s power plant in Tanjung Batu.

Suryadi said that as an alternative, PLN is now planning to develop gas pipeline to distribute 40 mmscfd of gas from Vico Indonesia to the power plant as requested by the upstream oil and gas authority SKK Migas.

Meanwhile, Hari Karyuliarto, Director of Gas at state-owned oil and gas firm PT Pertamina, the parent of Pertamina Gas, said that the suspension of the Simenggaris LNG project was also related to question over the economic feasibility of the project.

Hari said that with the Production Sharing Contract on the Simenggaris block set to expire soon, there is no certainty over the continuity of gas supply for the plant. Hari added that the LNG plant will also face tough competition with gas pipelines in the region, which are relatively cheaper. (*)