Indonesia Plans $1.7 Billion Liquefied-Natural-Gas Terminals Project

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Indonesia's state-owned gas-distribution firm PT Perusahaan Gas Negara (Persero) Tbk (PGN) (JAK:PGAS) (Jakarta, Indonesia) plans to undertake a $1.78 billion project to construct three liquefied-natural-gas (LNG) regasification terminals in East Java, West Java, and Medan, North Sumatra, to address the growing demand for LNG in the islands. PGN will secure funds for the project from the company and through international loans. Construction of the terminals is scheduled to commence by the end of 2008 and will continue until 2011. Operating and maintenance contracts will last from the fourth quarter of 2011 to 2016.

The proposed terminal in West Java is scheduled to be constructed in three phases. In Phase I, PGN will set up the terminal with a capacity of 1.5 million tons per year, equivalent to 200 million standard cubic feet per day (mmscfd), by 2012. This will be augmented with an additional 1.5 million tons per year (200 mmscfd) in Phase II that will be completed by 2018. Phase III will see an addition of 3 million tons per year (400 mmscfd) by 2024. PGN will simultaneously undertake expansion work on the 660-kilometer (km) South Sumatra-West Java pipeline, which connects supply sources in Grissik, South Sumatra with users in Rawa Maju, West Java. The pipeline has a capacity of 460 mmscfd. Expansion work will commence in 2009 and is expected to be completed by 2011. Demand for LNG in West Java currently stands at 1,112 mmscfd. However, the region is expected to have only 731 mmscfd of LNG supply capacity by 2011.

The terminal in East Java will be built in two stages. The initial capacity of 1.5 million tons per year will be achieved by 2011 in Phase I. Phase II will see an additional capacity of 1.5 million tons per year by 2017. The terminal in Medan will have a capacity of 1.5 million tons per year and is scheduled to be completed in a single phase by 2011. However, construction of this terminal will not commence until the Duri-Dumai-Medan gas-transmission pipeline linking Medan with the Duri gas fields in Dumai, Riau is built. Construction of the proposed 664-km pipeline with a carrying capacity of 300 mmscfd is scheduled to commence in 2009 and will see completion in 2011. The project will address the LNG requirements of households and industries in Medan, where LNG requirement is likely to reach 250 mmscfd by 2010.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.