Police investigate Sengkang LNG plant project

By Febry Silaban

The Crime Division of the National Police is currently conducting investigation into the mini LNG plant project in Wajo Regency, South Sulawesi Province, being developed by PT South Sulawesi LNG (SSLNG), over alleged violations of existing regulations.

In a letter to the Forestry Office of the South Sulawesi provincial administration dated September 15 of this year, a copy of which was obtained by Petromindo.com on Thursday, the police said its crime division has launched investigation into the project as SSLNG had deployed equipment supposedly to carryout construction activities in a forest area without the required permits.

Meanwhile, an October letter from the Forestry Office of the South Sulawesi administration to SSLNG, a copy of which was also obtained by this portal, the office could not fulfill a request made by the company to obtain recommendation letter for the issuance of so-called borrow and use permit for a 21.17-hectare of forest area as location of the project because the police have launched an investigation in the area.

A source told this portal that the police investigation is currently in progress and there have been no more construction activities in the project area.

This portal has previously reported that the Sengkang mini LNG plant project had encountered new obstacle, creating fresh uncertainty for the completion of the long-stalled project, as the Investment Coordinating Board (BKPM) has turned down a request from SSLNG for an extension of so-called temporary business license for natural gas processing.

BKPM in a letter dated October 17, 2017, a copy of which was obtained by this portal, said it ?could not process? the request made by SSLNG for an extension of the business license because around 20.85-ha of the land utilized by project is located in protected forest area.

BKPM said that it could only start processing the SSLNG request once the company has obtained the so-called borrow and use permit from the Ministry of Forestry to the particular forest area.

The Sengkang mini LNG plant was supposed to have been completed in 2015 to process gas into LNG from the Wasambo (Walanga, Sampi-sampi, Bone) gas field project in Sengkang PSC, South Sulawesi Province, operated by Energy Equity Epic Sengkang. Both SSLNG and Energy Equity Epic are controlled by ASX-listed Energy World Corporation.

But completion of the LNG plant project has suffered repeated delays due to a number of problems ranging from funding to agreement on the gas and LNG price with offtaker state-owned electricity firm PT PLN, previous reports said. Completion of this LNG facility is necessary to allow for the gas production in the Wasambo field.

SSLNG plans to build a combined 2 million tons per annum capacity of mini LNG plant in Sengkang, with capacity of 0.5 mtpa in the first phase, according to previous reports.

Editing by Reiner Simanjuntak