PGN to team up with Itochu to build LNG terminal

State owned gas distribution and transmission company PT PGN has confirmed that it planned to team up with Japanese firm Itochu to build a liquefied natural gas (LNG) terminal in East Java.

PGN?s director Adil Abas said PGN had signed a memorandum of understanding with the Japanese firm for the development of the terminal.

?The terminal will be located either in Tuban or Situbondo,? Adil said.

Itochu has been conducting a feasibility study for the project, according to the head of downstream regulatory body BPH Migas, Tubagus Haryono.

East Java, one of the country?s main industrial regions, is one of the main markets of PGN. It now gets supplies from the area?s gas producers, who deliver their gas through pipelines. The development of the LNG terminal would assure security of gas supplies to PGN?s customers in the area in case there is a trouble in the transmission pipeline.

Aside from the LNG terminal in East Java, another LNG terminal is being planned by state electricity company PT PLN in West Java. (Godang)