Pertamina to hold tender in January to modify Arun LNG plant

State oil and gas company PT Pertamina said it will hold pre-qualification process for tender in January 2012 for the modification of Arun LNG plant into LNG receiving terminal and regasification unit.

Pertamina has finalized the front-end engineering design (FEED) for the modification of the plant in June 2011.

The modification of the LNG plant will lead to an increase of capacity of the plant to 320 MMSCFD from 200 MMSCFD. The modification of the LNG plant will cost around US$73 million, with operational expenses estimated at US$4 million.

Pertamina through its subsidiary PT Pertagas will build a 350-km pipeline to transport 120 MMSCFD of gas from the terminal to North Sumatera with total investment estimated at US$301 million. Apart from that 60 MMSCFD of the gas will be sold to PLN and the remainder to other industries.

The installation of the pipeline is set to commence in January 2012 and followed by tender for EPC and construction in July 2012. Pertamina expects the pipeline could be used in 2013. The regasification operation at Arun is expected to commence in January 2013.

The Arun gas field, the only gas supplier for the plant is expected to stop production in 2014 due to the depletion of gas reserves, thus ending the production function of the whole facility.

Major gas buyers in Aceh, such as PT Pupuk Iskandar Muda (PIM), PT Aceh Asean Fertilizer, PT Kertas Kraft Aceh, and the province branch of state owned electricity firm PT Perushaan Listrik Negara (PLN) have strongly supported the modification of the Arun LNG plant into an LNG receiving terminal. (giok)