October 15, 2009 / 9:31 AM / 10 years ago

Indonesia state gas firm seeks LNG for new terminal

JAKARTA, Oct 15 (Reuters) - Indonesian gas distribution firm PT Perusahaan Gas Negara (PGN) (PGAS.JK) is seeking liquefied natural gas (LNG) for its planned receiving terminal in North Sumatra, a company official said on Thursday.

PGN plans to build a floating LNG receiving terminal in North Sumatra to secure natural gas supplies for a power plant and industry in the area.

“We plan to build a terminal with a 1.5 million tonne per year LNG capacity in North Sumatra,” PGN’s president director, Hendi Prio Santoso, told reporters, adding the firm was seeking LNG from domestic sources.

Santoso said the firm had written to the energy minister to ask about domestic supplies available.

The terminal is expected to be completed in 2012 and Indonesia’s energy watchdog, BPMIGAS, said it was still looking at various options for sourcing LNG.

“We are studying possible LNG supply from the Tangguh or Bontang plants,” Priyono, the head of BPMIGAS, said.

The Tangguh plant, operated by BP’s (BP.L) Indonesian unit, has a capacity to produce 7.6 million tonnes per year (tpy) via two trains.

An official at Bontang has previously said LNG exports from the plant would fall this year by 10 cargoes to 297 cargoes on the request of buyers hit by the global economic crisis.

Indonesia, the world’s third-largest LNG exporter behind Qatar and Malaysia, has previously said that the Bontang plant in East Kalimantan would produce 307 cargoes of 125,000 cubic metres each for export in 2009, down from 317 cargoes in 2008.

Santoso said if a domestic source could not supply the terminal, PGN would look to other sources abroad.

He did not give details.

BPMIGAS controls oil and gas contractors working in Indonesia.

Separately, Indonesia has also said a consortium of state own oil and gas firm Pertamina, PGN and PLN would build an LNG receiving terminal onshore with a capacity of 1.5 million tonnes a year in West Java, although construction has not started yet. Indonesia is seeking alternative sources of energy such as natural gas and coal to meet rising domestic demand for power and to reduce consumption of crude oil as its reserves dwindle.

Reporting by Muklis Ali; Editing by Ed Davies

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