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Donggi Senoro LNG may get two new buyers
Japan’s Kyushu Electric Power Company and Korea Gas Corporation (Kogas) may buy a total of 1 million metric tons of liquefied natural gas (LNG) per annum (MPTA) from the controversial Donggi Senoro LNG project, state oil and gas company PT Pertamina said
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apan’s Kyushu Electric Power Company and Korea Gas Corporation (Kogas) may buy a total of
1 million metric tons of liquefied natural gas (LNG) per annum (MPTA) from the controversial Donggi Senoro LNG project, state oil and gas company PT Pertamina said.
The two companies may buy LNG which was initially allocated for Japanese Kansai Electric Power
Co which dropped the plan to buy the LNG due to the unclear status of the project, Pertamina’s
head of LNG business Hari Karyuliarto said on Wednesday evening.
“We are still negotiating with them. Kogas may buy 0.7 MPTA of LNG and Kyushu may buy 0.3 MPTA of LNG,” Hari said.
He added that the prices offered by the two companies were slightly lower than Kansai’s price, but he refused to give details. The two companies expect to get the supply for 15 years.
Pertamina is a member of a three-company consortium that established PT Donggi Senoro LNG, a company set to build and operate the LNG plant. Pertamina holds a 29 percent participating stake in the venture, while PT Medco Energi Internasional holds 20 percent and Japan’s Mitsubishi Corporation holds a controlling 51 percent share.
PT Donggi Senoro LNG has also signed a head of agreement (HoA) with Japan’s Chubu Power Co. Inc stipulating that the company would be supplied with 1 million tons of LNG per annum from the plant for twelve years.
Despite the above agreements, the status of the project remain unclear as the government has yet to decide whether the gas from Matindok and Senoro fields, the gas sources for the LNG plant, can be used for export or not. The last Cabinet led by then vice president Jusuf Kalla, decided the natural gas from the two blocks should go to the domestic market. This led Japan’s Kansai to drop its plan to buy the LNG from the project.
The government, Medco and Pertamina have since been in protracted talks with three potential domestic buyers, state power producer PT PLN, state fertilizer producer Pupuk Sriwijaya and domestic ammonia producer Panca Amara Utama (PAU) but without clear results.
“We are still waiting the government decision on the breakdown between gas for LNG [export] and for the domestic market,” Medco’s operational director Lukman Mahfoedz said.
Energy and Mineral Resources Minister Darwin Zahedy Saleh did not respond to a question asking the latest status of the project. Earlier, he said that the ministry had submitted its recommendation to the Vice President’s office and the matter would be solved in a Cabinet meeting.
Initially, the project was expected to start producing LNG by 2013, but this will be certainly delayed due to protracted negotiations.
