PLN threatens to pull out from LNG receiving terminal project
Thursday, December 18 2008 - 01:55 AM WIB
The public utility plans to build the LNG terminal with state owned oil and gas firm PT Pertamina and state owned gas distribution firm PT Perusahaan Gas Negara (PGN).
Fachmi Mochtar, PLN?s president director, said the company would walk out of the LNG project if an agreement on the location of the terminal was not be reached soon. ?We are sticking with our initial proposal that the terminal be built onshore,? Fachmi said.
He also said lead consortium PGN had breached an initial consensus among the consortium members by saying that the planned terminal's capacity had been educed to 1.5 MTPA from 3 MTPA.
PGN's CEO Hendi Prio Santoso recently told a parliamentary hearing that the consortium may build a mini terminal with capacity of 1.5MTPA, or a floating terminal with capacity of 1 MTPA.
He said the floating terminal would be cheaper and a more economically feasible as it can be easily moved from one place to another. He said the consortium would meet on Dec. 23 to decide on the matter.
PGN?s proposal, however, is unacceptable to PLN, Fachmi said. The power company sticks to an erlier agreement that the terminal will be constructed on a 170-hectare onshore site where it is also planning to build a coal-fired power plant.
Besides the location, PLN and its partners have yet to agree on their stakes in the project. ?We want the rules governing the consortium to be fair,? Fachmi said.
As a result of the dispute, Fachmi forecast that the project would not get underway until 2010. The terminal, on which construction had been scheduled to begin this year, is expected to take four years to complete. (bernard)