PGN sees costs to develop planned LNG terminal soar

State gas distribution firm PGN estimated that the budget to build an LNG receiving terminal in East Java to soar by 50 percent to US$600 due to increase in crude price, which in turn caused costs to increase, CEO Sutikno said as reported by Bisnis Indonesia.

Sutikno said the terminal would be designed to process equivalent of 400MMCFD of LNG per day, or 3 MTPA. In the first phase, the terminal will have capacity of 1.5MTPA.

Sutikno said PGN is till waiting for the certainty of LNG supply to start the terminal?s construction and hoped that supply deal could be sealed, to enable construction to commence in 2009.

He said construction would take three years.

PGN plans the terminal to get LNG supply from Tangguh LNG, Bontang LNG. PGn may also source its LNG requirement from overseas.

A BPMIGAS official recently said that 1.5MTPA of Bontang LNG capacity would be allocated to domestic users including PGN and state electricity firm PLN. (*)