Pertamina boosts marketing of Bontang LNG
Tuesday, June 12 2001 - 04:22 AM WIB
?I recently met with TotalFinaElf, which is the largest financier of the project. They asked Pertamina to boost the marketing of the Train I and Pertamina agreed,? Pertamina?s president Baihaki Hakim told Petromindo.Com recently.
The Bontang LNG plant is owned by Pertamina and its production-sharing contractors TotalFinaElf of France; Unocal Corp and Vico, both of the United States.
Aside from the Train I, which is the ninth train at Bontang, Pertamina is also aggressively marketing the Tangguh LNG project in Irian Jaya, which is owned by the state company and a group of production sharing contractors led by Anglo-American energy giant BP.
Baihaki said both projects were equally important for Pertamina but he said it was ?easier? to market the Train I than the Tangguh project because the former was an expansion project, while the latter is a grassroot project.
?The development of Train I will be speedier than Tangguh, because Tangguh is a grassroot project while (the development of the Train I of) Bontang is cheaper since we don?t need to develop the infrastructure,? Baihaki said.
Indonesia, the world?s largest LNG exporter, is now competing with other LNG producers, including Malaysia, Brunei, Australia and Qatar for new LNG contracts in Taiwan and China.
According to Baihaki, Taiwan needs 1.7 million tons of LNG per year, while China needs three million tons of LNG per year.
China is likely to give two contracts to different suppliers as to reduce dependency on one supplier, Baihaki noted.
Baihaki said the Train I will produce about three million tons of LNG per year.
?But, we shall go ahead with the development of the new train, even if we are only able to secure a long term contract volume of 1.5 million tons per year.
?The remaining Train I output will be sold on the retail and spot market,? Baihaki said.
Pertamina has selected the Japanese consortium comprising Chiyoda Corp and Mitsubishi Corp to make the front end engineering design (FEED) of Train I and planned to hold a tender for the engineering, procurement and construction (EPC) contract after securing a buyer for the project.
Baihaki said the development of the Train I is estimated to cost US$500 million, most of which will be covered TotalFinaElf and its partners in Bontang. (Alex)