Pertamina sees C. Sulawesi LNG project onstream in 2007

State oil and gas company Pertamina said that it would proceed with plan to build liquefied natural gas (LNG) plant in its giant gas field in Donggi, Central Sulawesi and confident that the plant would become onstream in 2007.

?We are doing necessary preparations. In 2003, 10 TCF of reserves will be certified and we?ll undertake engineering and environmental impact assessment studies. So, whenever Pertamina is able to secure LNG contract, we could develop the LNG project fast,? Pertamina president Baihaki Hakim told reporters in Jayapura Thursday.

According to Baihaki, Donggi block has proven and probable reserves of around 15 TCF.

Baihaki said Pertamina is trying to market Donggi LNG to several overseas potential buyers, including US oil company Marathon Oil, which indicated interest to buy 6 million tons of LNG per annum to be brought to the West Coast of USA.

Baihaki is confident that Donggi LNG project could compete with other LNG suppliers, as development would cost cheaper.

?We could realize the project cheaper, because, unlike Tangguh which has big exploration sunk cost, Pertamina only incurred relatively small exploration expenditure in the block. More over, our engineering overhead would be much cheaper. If Tangguh?s two trains of LNG plant with 7 million tons per annum capacity would cost US$ 2.7 billion, Pertamina could do that with just $1.7 billion,? he said.

Baihaki said the plan was to construct 2 trains of LNG plants with 7 million tons per annum capacity with the possibility of developing petrochemical complex and gas-to-liquid (GTL) facility in Donggi. ?But LNG plant is the top priority,? he said.

If realized, Donggi will be Indonesia?s fourth LNG center after Arun in Aceh, Bontang in East Kalimantan and Tangguh in Papua. Tangguh LNG is expected to become onstream in early 2007.(alex)