Kogas to join Donggi Senoro LNG plant project

The world's largest natural gas buyer, Korea Gas (Kogas) Corporation, will join a joint venture with Japan-based Mitsubishi Corporation to develop the Donggi-Senoro liquefied natural gas (LNG) plant project in Central Sulawesi.

The companies have agreed to set up a PT Sulawesi LNG Development joint venture, which would hold a 59.9 percent stake in the PT Donggi-Senoro LNG project, Mitsubishi said in a press statement available on its official website on Monday.

Mitsubishi said it would hold a 75 percent stake in the joint venture.

“The involvement of Kogas has made this project the first joint LNG project between Indonesia, Japan and Korea and opened up a new era of cooperation in the energy sector for these three nations,” the firm said in the statement.

Donggi-Senoro, which is also partly owned by PT Pertamina Energy Services and PT Medco LNG Indonesia, produces around 2 million tons of LNG a year and 47,000 barrels of oil equivalent per day of condensate.

The US$2.8 billion (Rp 25.4 trillion) LNG plant is expected to begin operation and delivery by 2014. Funds will be allocated for, among other things, financing land acquisition and infrastructure development.

Before the announcement of the final investment decision (FID) on Jan. 21, Mitsubishi held a 51 percent stake at Donggi-Senoro, while Pertamina held 29 percent and Medco held 20 percent.

The involvement of Kogas through the Sulawesi LNG Development has created several changes in Donggi-Senoro's ownership.

Medco limited its ownership to 11.1 percent and let the joint venture acquire a 8.9 percent stake, resulting in an indirect 15 percent stake for Kogas in Donggi-Senoro.