TotalFinaElf expects Bontang Train I to become onstream in 2004
Thursday, October 11 2001 - 10:02 AM WIB
French oil, gas giant TotalFinaElf said that it would go on with its plan to build another liquefied natural gas (LNG) train in East Kalimantan which would be capable to produce additional 3 million tons of LNG per annum and was expected to become on-stream in late 2004, according to the company?s executive.
Jacques Rutman, TotalFinaElf E&P Indonesie vice president for LNG, said in a conference organized by Bimasena in Jakarta Thursday that front-end engineering design (FEED), which was awarded to Japan?s Chiyoda had been completed and engineering and procurement contract (EPC) pre-qualification had been announced on July 23, 2001. He expected EPC contract could be awarded as early as march 2002.
?The LNG market is now changing as buyers request for shorter terms and more flexible contracts. The current buyers? market trend make potential new buyers such as China and India taking advantage of that kind of situation in terms of pricing and they tend to have strong preference for reliable and proven resources. In the mean time competition is very aggressive with countries such as Malaysia, Qatar and Australia has already engaged in low cost expansion of their existing plant,? he said
?Train I has the qualities that can match all buyers ? requirement as we could offer competitive price as results of low cost expansion and low shipping cost due to relatively short distance to buyers,? he said.
He added that Bontang could offer flexibility and security of supply since PT Badak NGL, which operates the LNG plants, is the largest plant in the world with flawless operating and safety records over the past 20 years.
Aside from the expansion project bears no risk associated with grass root project, Bontang is still economical even for low sales volume.
?We could still run the Train I economically with even half of its capacity,? he said.
According to Rutman, East Kalimantan gas producers such as TotalFinaElf E&P Indonesia, Unocal Indonesia and Vico Indonesia which feed gas to Badak NGL, still have uncommitted reserve of at least 17 trillion cubic feet which could easily be developed to feed Bontang expansion plan.
He estimated the cost to develop another train in Bontang at around US$ 600 million, compared to some US$ 1 billion per train for the grass root project.
Badak NGL currently operates 8 LNG trains with production capacity of 22.25 million tons of LNG, 1 million ton of liquefied petroleum gas (LPG) and 10 million barrel condensates per year. (alex)