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Jakarta Post

RI'€™s Donggi-Senoro LNG project start delayed to 2015: Mitsubishi

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Sat, November 16, 2013   /  12:16 pm

Indonesia'€™s Donggi-Senoro liquefied natural gas (LNG) project will commence production in March 2015, later than the earlier target in 2014, major shareholder the Mitsubishi Corporation said on Friday.

Indonesia has several gas infrastructure projects in the works amid plans to meet its mushrooming energy demand, but is struggling to increase gas exports and output.

LNG plants commonly run behind schedule and over budget.

The Donggi-Senoro plant in Banggai, Central Sulawesi, was one of three such plants in the Asia Pacific set to come on stream next year and its delay will exacerbate an already tight market for LNG.

A spokesman for Mitsubishi Corp. in Tokyo told Reuters the current target for production was the end of March 2015.

He acknowledged the delay but did not give a particular reason for it.

Mitsubishi controls a 44.9 percent stake in the LNG plant, which is built by PT Donggi Senoro Liquefied Natural Gas.

Other shareholders at Donggi Senoro Liquefied Natural Gas are PT Medco Energi Internasional '€” Indonesia'€™s largest publicly listed oil and gas company '€” with an 11.1 percent stake, state oil and gas firm Pertamina with a 29 percent stake and Korea Gas Corporation (Kogas) with a 15 percent stake.

Construction of the 2.1 million ton per year Donggi-Senoro project is now 85 percent complete, Donggi Senoro LNG president director Gusrizal said as quoted in domestic media on Friday.

The construction of the project began in 2011.

'€œThe total investment is about US$2.08 billion,'€ said Gusrizal, who assumed the president director position on Aug. 1, replacing Djoko Wibowo.

Earlier in March, Djoko said the project was progressing 10 percent faster than planned, but his company would stick to its plan for the first delivery of LNG from the plant, which was scheduled for September or October next year.

'€œThe speedy construction gives us more time to prepare for production,'€ Djoko said when The Jakarta Post visited the plant.

Donggi Senoro LNG has signed 13-year contracts valid until 2027 to export 1 million tons of LNG a year to Chubu Electric in Japan, 700,000 tons a year to Kogas and 300,000 tons a year to Kyushu Electric Power in Japan.

Donggi Senoro LNG will obtain its gas supply from the Senoro and Matindok gas blocks.

Djoko said at the government'€™s request, the company would also sell part of its LNG production domestically, particularly to fertilizer firms and state-run electricity company PLN to meet high demand.

Researchers at the Bandung Institute of Technology (ITB) had previously suggested the Donggi-Senoro plant should allocate 335 million standard cubic feet of gas per day (mmscfd) for export, 60 mmscfd for the domestic fertilizer industry and 30 mmscfd for PT PLN.

According to Indonesian national gas company Perusahaan Gas Negara (PGN), gas demand in Southeast Asia'€™s largest economy will reach 5.4 billion standard cubic feet per day this year, almost half of which fuels power stations.

PGN is currently finalizing a gas purchase agreement for its 2 million ton per annum floating storage regasification unit (FSRU) in Lampung to supply gas to the Sumatra region. It expects the facility to be operational by July 2014.

The Donggi-Senoro plant will be the fourth LNG plant in Indonesia after it becomes operational, after the LNG plant in Arun, Aceh; the LNG plant in Bontang, East Kalimantan; and the LNG plant in Tangguh, Papua.

The country'€™s three LNG plants '€” Arun, Bontang and Tangguh '€” have a combined annual LNG production capacity of 43.9 million tons.

The Donggi-Senoro plant will be equipped with an LNG storage tank with a capacity of 170,000 cubic meters of gas, an LNG liquefaction train with a capacity of 2 million tons per annum, a jetty and a gas turbine generator with an output of 3x22.6 megawatts.

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