Pertamina Consortium To Build LNG Storage Facility In Jakarta, Indonesia

Published: 06-May-2009

By: Staff Writer Staff Writer Staff Writer

A consortium of PT Pertamina (Pertamina), PT Perusahaan Listrik Negara (PLN) and PT Perusahaan Gas Negara (Persero) Tbk (PGN) is planning to construct the three-million-ton-capacity liquefied natural gas (LNG) storage facility at Natuna D-Alpha block off the coast of Jakarta. The LNG facility is due to be completed in 2011. The floating terminal will feed PLN’s Muara Karang power plant and the latest Tanjung Priok plant.

The Natuna D-Alpha block is expected to start production in 2017.

PLN has received an assurance from the Bontang field in East Kalimantan to provide the terminal with 1.5 million tons of gas a year.

“Natuna will come on stream around 2016 or 2017, so we will [take gas from other sources in] the meantime,” Energy Minister Purnomo Yusgiantoro said.

“Gas from Bontang will feed the plant until Natuna comes on stream,” Purnomo said.

PLN has increased its usage of gas for electricity generation in a proposal to decrease its dependence on oil, thereby decreasing the government’s subsidy burden.

PLN hopes that the use of gas by the Tanjung Priok plant will save $787.5 million a year, based on a gas price of $5 per million British thermal units (mmbtu).

The Tanjung Priok plant will have a capacity of 740 megawatts a hour, with building estimated to be completed in 2011, Purnomo said, adding that the plant would require a supply of 200 million standard cubic feet per day (mmscfd) of gas.

It is expected that the new plant will decrease the likelihood of power disruptions in Jakarta and its surrounding regions.

Indonesia hopes demand for electricity to grow at around 10% a year over the next decade, said PLN’s president director, Fahmi Mochtar.

Present electricity reserves are not enough to prevent regular blackouts from occurring throughout the country.

The Tanjung Priok plant will cost $560.5 million. Mitsubishi Corporation is the main contractor, while PT Wijaya Karya, PT Areva T & D and PT Satyamitra Surya Perkasa are the principal subcontractors.

The carbon dioxide content of the Natuna gas has been expected at 70%, making it difficult and expensive to recover and process.

Development of the Natuna block has been postponed because of a dispute over its ownership between the government and Exxon Mobil Corporation.

Pertamina is keen to take control as operator of the block, but it requires working with other firms, because of the vast costs involved and its relative lack of technical expertise.

The government has granted Pertamina a 40% share of the Natuna block, with the rest of 60% to be divided by two or more partners.

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