PLN plans to build LNG floating terminal of its own

State electricity firm PT Perusahaan Listrik Negara (PLN) plans a study to build a floating LNG terminal in Banten parallel to the one planned by its consortium partner, state owned gas distribution company PT Perusahaan Gas Negara (PGN), Bisnis Indonesia reported on Friday.

"As the lead operator, PGN is doing a study to build a floating LNG Terminal. We are going to do a separate study as an alternative to what PGN is doing. Let's see which one is more eonomical," PLN's Vice President Rudiantara was quoted as saying on Thursday by the daily.

PGN, PLN and state owned oil and gas company PT Pertamina signed last year a memorandum of understanding to set up a consortium to build an LNG terminal in Banten to fulfill the region's, particularly PLN's, needs for gas. PLN intially proposed to build an onshore terminal but PGN as lead operator favored a floating offshore terminal.

PGN's CEO Hendi Prio Santoso said late last month that the consortium had reached an agreement to build a floating LNG terminal with the capacity of 1.5 milion tons per annum (MTPA), which is the amount of LNG supply commitment the consortium has thus far secured from producers.

Rudiantara however said on Thursday that the capacity was too small and thus should be increased to 3 MTPA.

He noted that last year PLN had signed a contract to repower its 720-MW Tanjung Priok power plant in Jakarta with gas supplies expected from the LNG terminal. The project is expected to come onstream in 2010.

"Thus, while waiting for the floating LNG terminal to get a 3MTPA LNG supply, we are looking for our own solution for the gas supplies to the repowering project which is now in progress," Rudiantara said, adding that investors from South Korea, Brazil, the Netherlands and Norway had sent proposals to build the PLN floating terminal. (*)