RI may not build Donggi LNG, reserves disappoint: Minister

Indonesia, the world's largest exporter of liquefied natural gas (LNG), may not go ahead with the development of its Donggi LNG plant because of increased domestic gas demand, the Dow Jones Newswires reported on Thursday from Singapore quoting Indonesia's Minister of Energy and Mineral Resources Purnomo Yusgiantoro as saying.

"There are possibilities we may not develop the Donggi block for LNG because we have other gas-based projects such as petrochemicals projects," Purnomo told delegates at the LNG Supplies for Asian Markets conference in Singapore.

Donggi is located onshore in central Sulawesi.

An LNG project using the gas from the Donggi block had been planned to come onstream in 2008. This is meant to comprise two gas liquefaction trains with a combined capacity of 6.6 million metric tons a year.

Sales contracts for LNG from Donggi haven't yet been signed and, if, as the minister suggested, the project is scrapped, the gas may instead be used in the Indonesian domestic market.

"We're finding gas reserves (at Donggi) - not as (much as)we expected, but we're still doing exploration," Purnomo said.

The LNG Supplies For Asian Markets conference is organized by Conference Connection.(*)