TotalFinaElf seeks political support from East Kalimantan to develop Train I

French oil and gas company TotalFinaElf is seeking the political support of the East Kalimantan legislative council for the development of the Bontang LNG plant Train I facility, according to council speaker Sukardi Djarwo Putro.

Sukardi was quoted as saying by the Radar Kaltim daily that TotalFinaElf senior officials recently asked the council to help persuade the central government in Jakarta to allow the company to proceed with the planned expansion of the Bontang LNG plant, which currently has eight LNG train facilities.

Sukardi said that there has been fears among TotalFinaElf management that Jakarta would prefer for the development of the Tangguh LNG facility in Irian Jaya province in a bid to help boost economic activity in the less-developed province.

The government is planning to supply LNG to China. But it has yet to decide whether to source the LNG from the Tangguh plant or from the Bontang Train I facility.

Some officials at the state-owned oil and gas company Pertamina prefer the development of the Train I facility because it less costlier as it is an expansion project, while the Irian Jay LNG facility is a grassroot project. The cost to develop the Tangguh facility is estimated at between US$3-4 billion, while the cost to develop the Train I facility is only $600 million.

But sources said that caretaker minister of energy and mineral resources Purnomo Yusgiantoro prefer for the development of the Tangguh plant.

The Tangguh plant is owned a consortium led by BP, while the Bontang facility is owned by a consortium led by TotalFinaElf.

China is planning to buy more than 3 million tons of LNG per year ? its first LNG imports ? for its southern province of Guangdong.

Indonesia is tightly competing with other countries, including Qatar, Malaysia, Brunei, Australia, Iran and Russia to become the first LNG supplier to the world's largest nation.(*)