After a Japanese buyer pulled out from the Donggi-Senoro project, Indonesia is looking for local buyers for liquefied natural gas (LNG) from the project.
Fahmi Mochtar, president director of PLN, said: “Donggi-Senoro is an opportunity to meet our gas consumption. We are interested in using the (Donggi-Senoro) gas for our power plant. The gas price will be lower if we build a gas-fired power plant near the project in Sulawesi.”
Mr. Mochtar added that the company would plan to construct a gas-based power plant with a minimum generating capacity of 100MW near the project, as it would cost less when compared to shipping the LNG to power plants in Java or Sumatra.
Karen Agustiawan, president director of state oil firm Pertamina, informed that previously the gas price was $6 per million British thermal unit (mmbtu) at the well head, which would raise to $12 per mmbtu for consumers on Java island.
Since Jusuf Kalla, vice president, has stated in June that gas from the project should be sold to the domestic market, the Donggi-Senoro project, which requires investment of $1.7 billion for upstream activities and $2 billion for downstream, has been under threat.
Pertamina, Indonesia’s PT Medco Energi International and Japan’s Mitsubishi had agreed up on to construct the plant with a capacity of 2 million tonnes per year. Pertamina and Medco previously agreed to sell 1 million tonnes of LNG from Donggi-Senoro to Chubu Electric Power and 1 million tonnes to Kansai Electric, which are linked to a cocktail of Japanese crude prices. Other potential domestic buyers include gas distribution firm PT Perusahaan Gas Negara (PGN) (PGAS.JK) and some fertiliser firms.
According to data from PLN, the company’s gas consumption is expected to raise from an estimated 246.4 bcf in 2009 to 501.2 billion cubic feet (bcf), more than double in 2018.
