Pertamina, Medco close to appoint C. Sulawesi LNG plant developer

State oil and gas company Pertamina and JSX-listed energy firm Medco Energi Internasional are slated to pick winning bidder to build the country?s first downstream LNG plant to tap the companies? gas reserves in Central Sulawesi.

?Hopefully, the decision on who will develop Central Sulawesi LNG plant could be reached this week or next week,? Medco E&P President Loekman Mahfoedz told Petromindo.Com Tuesday.

Four companies including Japanese firm Mitsui and Mitsubishi are known to have bid to operate the plant, which, according to Loekman, will have initial capacity of 2 million tonnes per annum. Other known bidder is Australian firm LNG Limited, which teams up with Japan?s Osaka Gas.

Loekman said that the LNG plant would adopt net back system, where gas suppliers would be paid in line with LNG price sold by LNG plant. Loekman also said that Medco and Pertamina would have minority stake at the LNG plant.

Gas supply for the proposed LNG plant would come from Donggi block, which is operated by Pertamina and adjacent Pertamina-Medco-operated Senoro-Toili block Both blocks. Loekman said combined proven and certified gas reserves in both blocks are 2.3TCF.

Loekman said the plant was slated to start production in 2009.

Medco Energi Director Rashid Mangunkusumo said that both Medco and Pertamina teams are currently working separately to select bidders of their choice and would then meet to make final selection to determine one winner.

Pertamina EP Director Tri Siwindono declined to comment on the matter, but in August 2006 he said that if picked as winner, Mitsubishi would buy significant amount of LNG produced from Central Sulawesi project. (godang/alex)