By: Mahendra Siregar and Hari S. Noegroho

PGN to build LNG terminals worth $1.7 billion

State gas distributor PT PGN plans to build three liquefied natural gas receiving terminals with a total investment of $1.78 billion, The Jakarta Post reported Wednesday (5/3/08).

President Director Sutikno said the three projects would be located in West Java, East Java and North Sumatra as the focus of LNG distribution networks.

The North Sumatra and East Java terminals will cost about $446 million and $574 million respectively. Project funds will come from surplus capital and foreign loans.

Sutikno said the company would begin the projects in late 2008 and the work would be completed in North Sumatra in 2011 and in 2017 for East Java. The first phase of the West Java terminal is expected to be completed in 2012.

"The LNG terminals will supply the gas in their respective regions, whose gas demands are expected to rise in the coming years," Sutikno said.

Currently, industries and households in West Java burn 1,112 million cubic feet of gas per day.

Pertamina says Natuna gas output to start 2015

State oil firm Pertamina said Wednesday (5/3/08) the huge Natuna-D-Alpha gas field will not start production until 2015 and will need investment of about $15 billion to produce 1 billion cubic feet per day, Reuters reported.

"This field is complex. To produce one billion cubic feet of gas a day for phase I, it needs around $15 billion of investment and about seven years time to develop," Pertamina CEO Ari Soemarno said. "If we expand the output then it will need more investment."

Last month, the government asked Pertamina to get ready to develop the Natuna gas reserves on its own, the latest sign it is moving ahead with development without its former partner ExxonMobil Corp.

Soemarno said that because of the need for such a big investment, Pertamina will propose a consortium of companies to develop Natuna.

Soemarno said several companies, including Total, have expressed an interest in participating in Natuna.

The Medco Group said it is ready to buy more than a 10% stake in the giant gas block from Pertamina, Asia Pulse reported Thursday.

"We welcome the offer from Pertamina to cooperate in the development of the Natuna Block. We will buy a stake," Arifin Panigoro, the owner of the country's largest private oil company said.

Pertamina replaces key directors

The government has appointed new directors at state oil and gas firm Pertamina including in the upstream and processing divisions in a bid to improve performance, a minister said on Wednesday (5/3/08), Reuters reported.

Pertamina has said it plans to boost its oil production by 16.4% next year as the government tries to limit the crippling impact of high oil prices on its budget.

Ari Soemarno will continue as the state firm's chief executive officer.

Rukmi Hadihartini, 55, replaces Suroso Atmomartoyo as director of processing, which deals with buying crude and looking after refineries. Hadihartini previously worked at Pertamina's processing directorate.

Karen Agustiawan, 50, replaces Sukusen Soemarinda as director of upstream, covering oil exploration and production. She previously worked in the president director's office at Pertamina, as well as spells at Mobil Oil and Halliburton.

The government also appointed Waluyo as the new human resources director. He previously worked at the Commission of Corruption Eradication (KPK).

Soemarno has said the firm planned to increase oil output to 170,000 barrels per day next year from an estimated 146,000 barrels per day this year.

Thailand's PTT bids for Tangguh gas

Upstream oil and gas regulator BP Migas confirmed Wednesday (5/3/08) it was currently reviewing a proposal from Thailand's petroleum authority PTT on the purchase of gas from Tangguh Liquefied Natural Gas (LNG) plant in Papua, The Jakarta Post reported.

BP Migas chairman Kardaya Warnika said PTT had submitted a bid aiming to top a deal previously signed between the regulator and US-based Sempra.

"So far, PTT offers the best deal, but we are still waiting, should there be a better one," Kardaya said, refusing to mention the price.

A number of other buyers, including from Japan and Korea, have also shown their interest in buying the gas, with each bidding for 1.85 metric tons per annum (mtpa) or almost half the amount poised to be delivered to the US company.

In its latest report, BP Migas said the Tangguh project was ready to produce gas by the end of the year. The plant will have a total production capacity of 7.6 mtpa and proven reserves of more than 14 trillion cubic feet of LNG.

Source: ekon.go.id