Slim chance for Pacific Oil to build another E. Kalimantan LNG plant

Pacific Oil & Gas? (POG) hope to build an LNG plant in Bontang LNG complex, East Kalimantan is fading as Indonesian upstream oil and gas authority BPMIGAS said currently the province has not sufficient gas to fulfill the demand and the project?s development is not priority.

?Currently, proven uncommitted gas reserves in East Kalimantan exceed the future demand. East Kalimantan gas is allocated to feed Bontang LNG plant, East Kalimantan and the proposed East Kalimantan to Java pipeline. If all the projects were realized, there would not be enough gas to feed them all. Therefore, I would not think it would be currently feasible to build another LNG plant with capacity of 4 MTPA without sacrificing other projects,? said BPMIGAS chairman Kardaya Warnika in an interview Tuesday.

?More over, development of another LNG plant in East Kalimantan is not a priority as Bontang LNG plant would have 12 MTPA of spare capacity by 2010 and the expansion of Bontang?s ninth LNG plant had also been planned,? he said.

Kardaya did not give the number of uncommitted proven gas reserves in East Kalimantan. But he said that proven reserves could be increased if production-sharing contractors are intensifying prove-up drilling programs. ?But that?s not the case. Currently PSCs are in wait and see attitude. They would want to get their current reserves sold and then PSC contracts extended to justify them to conduct prove-up drillings.?

POG had secured permit from the government to build a separate LNG train in Bontang LNG complex in 2002. The company, which is controlled by pulp and paper tycoon Sukanto Tanoto, had also secured market in Jiangsu, China, where the company, partnering with China?s PetroChina, is planning to build a 700-MW gas-fired power plant. (alex)