Pertamina begins construction of Arun LNG storage & regasification terminal

State-owned oil and gas company PT Pertamina has started the construction of the Arun LNG storage and regasification terminal in Aceh following a ground-breaking ceremony held on Saturday.

Pertamina Director of Gas Hari Karyuliarto said that the LNG storage and regasification terminal facility, the first in the world, will become the backbone of gas supply for industries in Aceh and neighboring North Sumatra.

Pertamina set the final investment decision for the project in February of this year, and assigned PT Rekayasa Industri as the EPC contractor in March of this year.

?With the groundbreaking today as well as the progress achieved so far, shows strong commitment of Pertamina and its partner in delivering the project on time. Aside from its prestige and quite challenging, because it?s the first in the world, the project has been awaited to help ensure gas supply for power plants and industries in Aceh and North Sumatra. This is in line with the plan to complete the open access gas transmission pipeline project linking Arun and Belan (in North Sumatra),? Hari said at the groundbreaking ceremony as quoted by company press statement received Monday.

The Arun LNG storage and regasification terminal is designed to have a capacity of 400 mmscfd or equal to 3 million tons per year. The project currently has a gas supply commitment of 120 mmscfd for state-owned electricity firm PT. Perusahaan Listrik Negara.

?We?ll continue to seek for additional gas supply so that the installed capacity can be optimized,? Hari said.

Combined with the Arun-Belawan gas pipeline project, Pertamina is investing around US$750 million, of which $80 million is allocated for the LNG regasification plant. As of end of this year, about half of the 340 Km pipeline project is estimated to be completed, giving optimism on the part of Pertamina to be able to conclude the two projects on time.

Editing by Reiner Simanjuntak