Pertamina and PLN to build mini LNG storage and regasification facilities

State owned oil and gas company PT Pertamina and state utility PT PLN plan to jointly build six mini liquified natural gas (LNG) storage and re-gasification facilities in different locations across the nation.

Senior manager of gas and oil procurement of PLN, M. Suryadi Mardjoeki said that PT Pertamina has appointed a consultant firm to undertake feasibility study prior to the construction of the LNG facilities. The study shows that the projects are feasible although the price of each facility is not the same.

Pertamina and PLN have earlier agreed to establish joint venture in developing the projects. The formation of the JV company is scheduled to be finalized by the end of this year.

Suryadi said the feasibility study covers LNG transportation price, storage, regasification and gas price. Based on the feasibility study the price of gas is above Marine Fuel Oil (MFO) benchmark, however it is still below High Speed Diesel (HSD).The price of gas to be produced by the planned mini LNG facilities in Sumbawa and Kupang, for instance, is estimated on average at US$12 per MMBTU.

It is planned that the mini LNG facilities will be built in two stages. In the first stage mini LNG facilities will be built in Pasanggaran, Bali with capacity of 10 MMSCFD, Pomala 25 MMSCFD, Halmahera 40 MMSCFD and East Kalimantan 25 MMSCFD.

The total investment in the first phase of the projects is estimated to be around US$ 45 ? US$ 60 million. The project is scheduled to begin construction in 2012 and followed by commercial operation in 2013-2014.

As for the second phase, the mini LNG facilities will be built in Maluku and Sumbawa. The gas need serviced by the Sumbawa mini LNG facility is estimated to reach 20 MMSCFD.

Suryadi said in principle PLN?s power plants will use gas to support electricity consumption during peak hours. (giok)