PGN to spend $1.78b to build LNG receiving terminals

State-owned gas company PT Perusahaan Gas Negara (PGN) plans to build three liquefied natural gas (LNG) receiving terminals in West, East Java and North Sumatra, which will cost US$1.78 billion.

PGN President Drector Sutikno told a hearing with the House of Representatives on Monday, the terminals would fulfill the growing demand in the coming years. Gas demand in West Java has reached 1,112 MMSCFD, but the supply will dwindle to 731 MMSCFD in 2011 and run out in 2024.

The West Java receiving terminal with 6 MTPA will be completed in three stages. In 2012 it will have to supply 1.5 million tons per year or 200 MMSCFD, in 2018 to supply 1.5 million tons per annum and in 2024 to supply 3 million tons a year or 400 MMSCFD. "We will cooperate with state-owned electricity firm PLN and gas producers," Sutikno said.

In East Java, the gas demand has hit 400 MMSCFD, whereas the supply only reached 170 MMSCFD last year and gas reserve will be over in 2014. The LNG receiving terminal construction with capacity of 3 MTPA will last in two phases, in 2011 to produce 1.5 million tons and in 2017 to supply 1.5 million tons a year.

Gas demand in North Sumatra will reach 250 MMSCFD in 2010, but gas reserve will run out in 2011. The 1.5 MTPA LNG receiving terminal will be completed in 2011 and produce 1.5 million tons per year. "The terminal will not be built if the gas transmission pipeline connecting Duri, Dumai and Medan does not materialize," Sutikno said.

Sutikno said that PGN is expecting to get supplies from Tangguh LNG expansion project, Bontang LNG for the projects, adding that PGN is also trying to get LNG supplies from overseas producers. (godang/bernard)