Two Arun liquefaction units to be relocated to Irian

The government plans to relocate two natural gas liquefaction units belonging to PT Arun Natural Gas Liquefaction (Arun NGL) in Arun, Lhokseumawe, Aceh, to Tangguh, Irian Jaya, Jakarta-Based daily Bisnis Indonesia reported on Tuesday.

As a compensation for the Acehnese, each liquefaction unit would be compensated US$100 million, according to the director general of oil and gas at the Ministry of Energy and Mineral Resources, Rachmat Sudibyo.

With such a compensation system, the Acehnese should not reject the planned relocation of the two liquefaction units.

Rachmat said that the two liquefaction units were currently idle, and such an idle situation only burdens costs to Arun NGL, in terms of maintenance costs. Therefore, it would be useful if they were moved to the Tangguh gas project, that is currently developed and owned by Beyond Petroleum Plc.

The relocation of the two liquefaction units would help reduce the investment costs that had to be borne by BP and state-owned oil and gas company Pertamina.

Rachmat acknowledged that relocation of the two refinery units, if it is materialized, would be the first of its kind in the world. Moreover, the number of LNG liquefaction plants across the world is not many.

Technically, Rachmat said, relocating LNG liquefaction plant would be a lot easier than relocating fuel refinery plant because of its low corrosion level.

He said the government and Pertamina would learn the experience of state fertilizer firm PT Pupuk Kaltim following its relocation of fertilizer plant from the Netherlands. (*)