Pertamina, PLN and PGN to jointly build floating LNG terminal

Three state companies, PT Pertamina, PT Perusahaan Listrik Negara (PLN) and PT Perusahaan Gas Negara (PGN) are determined to jointly build a 1.5 MTPA floating liquefied natural gas (LNG) receiving terminal offshore Jakarta this year.

The heads of agreement for the establishment of the consortium was signed by Pertamina?s President Director Karen Agustiawan, PLN?s President Director Fahmi Mochtar, and PGN?s President Director Hendi Priyo Santoso in Jakarta on Friday.

The three companies hoped that the consortium could be established this year so that the construction of the floating LNG terminal could soon be realized. The terminal is expected to begin operation by 2011.

?Pertamina will have a bigger share in the ownership of the consortium,? Karen said. She added the consortium would ask the government?s help to ensure certainty in the LNG supply for the floating LNG terminal.

The consortium had received a commitment from French oil, gas firm Total Indonesie to provide gas supply of 1.5 million tons a year.

PGN's Hendi said that the three companies would use their internal funds to finance the construction of the floating LNG terminal. He did not disclose the amount of investment for the project but said that the construction costs would be only about 25 percent of the total costs needed for the construction of a LNG terminal built onshore.

Meanwhile PLN?s Fahmi said that PLN would become the standby buyers of the consortium?s LNG. He said that the gas need for PLN?s power plants in Java was estimated to increase sharply to 1,020 million cubic feet in 2012.

PLN is ready to buy the gas at market price, he added. (*)