PGN preparing relocation of Belawan FSRU to Lampung

State owned gas distributor PT PGN looks set to abandon an earlier plan to build a floating storage and regasification unit (FSRU) in Belawan and is readying itself to relocate the project to Lampung.

PGN had initially planned to establish an FSRU in Belawan. However, after state owned oil and gas firm Pertamina revealed that it would convert the Arun LNG plant in Aceh into a receiving terminal, the government decided to relocate the Belawan FSRU to Lampung.

The Jakarta Post reported that through a formal letter, the State-Owned Enterprises Ministry requested PGN to implement the relocation and ordered Pertamina to repay the investments that PGN had spent for the Belawan FSRU as audited by an independent audit.

?We have anticipated the possibility of relocation, but we haven?t formally talked to contractors. We?ll do that as soon as possible,? PGN Director of Investment, Planning and Risk Management Chief Wahid Sutopo said as reported by the Post.

Sutopo said that currently, the feasibility study for the project had been started and he was certain that the liquefied natural gas (LNG)-receiving terminal could begin operations as targeted.

?We?re still calculating the total investment needed to build the FSRU and whether it will have the same capacity as planned for Belawan in North Sumatra,? he told reporters in Jakarta on Wednesday.

However, he was afraid that a delay might take place in the issuance of the permit and land procurement; therefore, he expected the government to legalize the project through a presidential instruction so that the company could accelerate its project activities.

Wahid continued that PGN is hoping to merge the project with the project to build an FSRU in Sunda Strait by state steel maker plant PT Krakatau Steel. He said Krakatau Steel would then receive gas from the planned Lampung FSRU.(*)