Natuna deal signing next week: Abda'oe<\/p>\n
JAKARTA (JP): The Indonesian government, indicating that it
\nwill soon start developing the biggest project ever in the
\ncountry's history, said yesterday that it will sign an agreement
\nwith Exxon Corp. of the United States next week for gas
\nliquefaction in Natuna.<\/p>\n
Faisal Abda'oe, the president of the state oil company
\nPertamina, told reporters here that the agreement on the US$35
\nbillion project will be signed next Monday.<\/p>\n
He declined to elaborate on the deal or on the production
\nand profit sharing arrangements.<\/p>\n
He said, however, that Exxon and Pertamina would divide the
\ninvestment capital required for the development of the natural
\ngas project on a 50-50 basis.<\/p>\n
The Natuna deal has been in limbo for two years due to
\nconflicting opinions over profit sharing, government guarantees
\nand taxes.<\/p>\n
Earlier news report said that Exxon needed special tax
\nincentives to make the project feasible.<\/p>\n
Indonesia has passed new tax laws, made effective this
\nmonth, that warrant certain benefits for the project.<\/p>\n
One of the new laws stipulates that foreign investments in
\nfrontier areas are eligible for tax privileges, including the
\nright to carry forward losses for up to 10 years and the
\nreduction of the 20 percent withholding tax on after-tax profits
\nof permanent establishments in Indonesia.<\/p>\n
On the tax issue, Abda'oe commented yesterday: "Actually,
\nthe negotiations had been completed in November but the results
\nwere still subject to the new tax law which became effective this
\nmonth."<\/p>\n
Preparations on the agreement were signed here on Nov. 10
\nwith U.S. Commerce Secretary Ron Brown, Indonesian State Minister
\nfor Research and Technology B.J. Habibie and 10 other Indonesian
\nministers witnessing.<\/p>\n
The project is located about 1,110 kilometers north of here
\nand about 600 kilometers northeast of Singapore. The seabed
\naround the Natuna island is estimated to have 210 trillion cubic
\nfeet of gas reserves.<\/p>\n
Early studies of the project estimate that out of the
\nreserves, about 38 million tons of liquefied natural gas can be
\nproduced annually for about 20 years.<\/p>\n
Participation<\/p>\n
Abda'oe also said yesterday that Pertamina was seeking to
\nrelease part of its stake in the historic deal. "We do not want
\nto retain all of the 50 percent. We want others to participate,"
\nhe said.<\/p>\n
The executive cited that several producers, buyers and
\nfinanciers had already expressed interests, but he said that any
\ndecision will have to wait for the signing.<\/p>\n
Studies of the project expect that 18 offshore platforms
\nwill be constructed to treat the more than 10 billion cubic feet
\nof gas each day.<\/p>\n
The studies also estimate that the offshore facilities will
\ninclude 70,000 tons of structural steel, 910 kilometers of
\npipelines and 2.6 million horsepower of turbo machinery.<\/p>\n
Even without Natuna, Indonesia -- with an annual production
\ncapacity of over 23 million tons -- is the biggest producer of
\nliquefied natural gas (LNG) in the world. All of the LNG is
\nexported to Japan, Taiwan and South Korea.(hdj)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/natuna-deal-signing-next-week-abdaoe-1447893297",
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"sponsor": "Okusi Associates",
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