PLN hopes to finalize Sengkang LNG deal by year-end

State electricity firm PT PLN (Persero) is finalizing talks with Australia-listed firm Energy World Corporation (EWC) over plan to offtake LNG that would be produced from the latter?s Sengkang LNG project in South Sulawesi .

?We hope to be able to seal LNG sales agreement towards the end of this year,? PLN?s Gas and Fuel Division Head M. Suryadi Mardjoeki said on Tuesday.

Mardjoeki said that PLN sought to buy the entire LNG production from the project?s first phase of 0.5 million tonnes per annum or about 70 MMCFD as stated on the project?s PoD approved by upstream oil, gas authority BPMIGAS.

Mardjoeki said LNG from Sengkang will be used to fuel its proposed power plants in Hamahera, North Maluku and in Pomalaa, Southeast Sulawesi . He added that the Sengkang LNG project is expected to start supplying the fuel to PLN by the end of 2013.

PLN and state oil, gas company PT Pertamina (Persero) has earlier agreed to set up an LNG shipping JV that will tansport LNG to eight LNG terminals that would be built across eastern Indonesia .

EWC is planning to build an LNG plant in Sengkang with initial output of 0.5 MTPA, ramping up to 2 MTPA using gas from Sengkang PSC, where the company?s subsidiary the operator and 100 percent interest holder. The LNG plant will be developed using downstream scheme, meaning that development cost of the plant will not be subject to cost recovery. (bernard)