PGN, Pertamina sign agreement to set up LNG terminal JV

State owned gas distribution company PT Perusahaan Gas Negaraq (PGN) and state owned oil and gas firm PT Pertamina signed on Thursday the agreement to set up a joint venture firm to operate an LNG Floating Storage and Regasifcation Terminal in West Java.

PGN said in a statement the agreement was signed by PGN's President Director Hendi Prio Santoso and Pertamina's President Director Karen Agustiawan in a ceremony witnessed by Minister of State Enterprises Mustafa Abubakar and Minister of Energy and Mineral Resources Darwin Zahedy Saleh.

Pertamina and PGN will own 60 percent adn 40 percent stake respectively in the joint venture. Pertamina will send its officials to become president commissioner, president director, diretor of technics and operation and a commisioner in the new company. Meanwhile, PGN will send its staff to fill in the position of director of finance and administration and a commissioner.

State owned electricity firm PT Perusahaan Listrik Negara was initially interested to join the partnership but has decided to draw back. It will, however, become the buyer of gas supplied from the terminal.

The terminal will get LNG supplies totalling 11.75 million tons over a period of 11 years from the Bontang LNG plant in East Kalimantan.

Both firms hopes to set up the joint venture firm soon so that it can start developing the LNG terminal later this year. (bernard)