Pertagas to tender East Java LNG terminal, pipeline projects in 2011

PT. Pertagas, a wholly-owned gas distribution unit of state oil and gas company PT Pertamina, will tender the projects to develop a liquefied natural gas (LNG) floating storage receiving terminal (FSRT) in East Java and a pipeline linking to Semarang, Central Java to Gresik, East Java next year.

The firm expects both projects to be completed in 2013.

?We?ll tender the Semarang-Gresik pipeline project in 2011 and finalize it in 2012 or 2013, in parallel with the FSRT project. Now, we?re seeking the right location for the FSRT. It may be in Surabaya, Gresik, or perhaps in Central Java,? Suharyanto, president director of Pertagas said on the sidelines of the conference and exhibition of IndoPipe in Jakarta on Thursday.

?The FSRT will store 450 MMSCFD gas. The gas (for the Semarang-Gresik pipeline) could be derived from Cepu block that can produce 200 MMSCFD,? he said.

He added that his company had negotiated with two potential consumers of gas in East Java, namely consumer produts manufacturer PT Maspion and a metal firm in Surabaya. ?The two companies can afford to buy the gas at the same price with LNG,? he said.

?Based on a survey, the two companies can buy gas as the same price with LNG, meaning that it is above the current market price. Currently, the price of LNG is between US$8 and $14 per MMBTU. That?s still cheaper compared with the diesel oil they currently use,? he said. (godang)