PGN leads consortium to build two LNG receiving terminals

State-owned gas distribution company PT Perusahaan Gas Negara (PGN) has been appointed by the government to lead the consortium to build two liquefied natural gas (LNG) terminals in West Java and East Java respectively.

The plan was recently unveiled during a limited Cabinet meeting led by Vice President M. Jusuf Kalla in Jakarta and attended by Minister of Energy and Mineral Resources Purnomo Yusgiantoro, State Minister for State Enterprises Sofyan Djalil, BPMIGAS' chairman Kardaya Warnika, and the president directors of PGN, state owned oil and gas firm PT Pertamina and state owned elecricity firm PT Perusahaan Listrik Negara PLN, PGN said in a press release.

The meeting also outlined the necessary steps to be taken to prepare for the construction of the new gas distribution facilities, PGN said.

As an initial step, PGN, Pertamina and PLN would establish a consortium to build an LNG terminal in West Java. PGN has been appointed as the consortium's leader both in arranging LNG purchases and in the construction of the LNG terminal.

PGN said that the LNG terminal which would be built in West Java would have a receiving capacity of about 3 million tons of LNG a year or equivalent to about 400 million cubic feet per day. The terminal will receive LNG from Bontang and Tangguh LNG plants.

The West Java LNG terminal is expected to begin operation by the end of 2011, while the one in East Java will be built in later years after assessing the availability of the LNG supply and their potential demand.

Meanwhile, in order to meet the growing gas demand in northern Sumatra, PGN has also been tasked to build a 664-km gas pipeline linking Duri, Dumai (in Riau) and Medan.

The pipeline which will have a capacity of transmitting between 250 and 300 million cubic feet of gas will receive gas from ConocoPhillips and other gas producers.

The project is expected to begin in 2009 and to be completed by the end of 2011. (godang)