Pertamina, Medco and Mitsubishi seek loans for C. Sulawesi LNG plant

State oil and gas firm PT Pertamina and Japanese firm Mitsubishi Corp. will seek $800 million in loans to develop a liquefied natural gas (LNG) plant in Central Sulawesi.

 

The companies and JSX-listed energy firm PT Medco Energi Internasional plan to build the plant at a cost of $1.2 billion, Pertamina's Director Finance Frederick Siahaan told reporters Friday in Jakarta .

 

The three companies expect to select the loan providers this year and raise the funds early next year, Siahaan said.

 

Medco and Pertamina are in the process of finalizing talks with Mitsubishi to build the plant that will have the capacity of between 2 and 2.5 million tons per annum. Gas supplies will be sourced from Pertamina’s 100 percent-owned Donggi block and Senoro-Toili block, which is equally owned by Pertamina and MedcoEnergi. Both blocks have combined certified reserves of 3.7 trillion cubic feet.

 

Mitsubishi will own a majority stake in the LNG plant (51percent) and also act as offtaker, with Pertamina and MedcoEnergi having 29% and Medco 20% respectively. The plant will be operated under a downstream system, under which the plant will buy gas from producers on a certain pricing formula. HoA on gas supply will be signed this month with final investment decision is expected to be made at the end of the year.

 

The plant is expected to be completed in 2010.

 

Earlier, Lukman Mahfoedz, CEO of Medco EP, the downstream unit of MedcoEnergi, that is directly involved in the LNG project, said that the partnership had selected three companies, including a Japanese firm as the plant’s EPC contractor candidates. He declined to give names. (godang)