24 Japanese firms to buy Natuna LNG: Pertamina

24 Japanese firms to buy Natuna LNG: Pertamina

JAKARTA (JP): At least 24 Japanese companies have shown an
interest in buying the liquefied natural gas (LNG) that will be
mined in Natuna, about 1,110 kilometers north of here, the
president of the state oil company Pertamina says.

"Their response to our LNG offering was excellent. They have
pledged not only to buy LNG but also to finance the construction
of gas liquefaction facilities in Natuna," Pertamina's president
Faisal Abda'oe said in a hearing with Minister of Mines and
Energy I.B. Sudjana and Commission VI of the House of
Representatives yesterday.

Encouraged by the pledge of support by the Japanese companies,
Pertamina and its contractor Esso Natuna Inc., an affiliate of
Exxon of the United States, plans to commence construction of two
gas liquefaction plants in 1997. The two plants will be called
Train-A and Train-B, Abda'oe said.

Esso has discovered a huge gas field offshore Natuna islands
containing gas deposits of about 45 trillion cubic feet, capable
of providing material for the production of up to 35 million tons
of LNG per year for the next 20 years.

Abda'oe estimated that the construction of the two planned
units, which will have a combined production capacity of 5.2
million tons of LNG per annum, would be completed within two
years.

The US$35-billion Natuna project, to be developed jointly by
Pertamina and Esso, is designed to have six LNG production units
supported by 18 platforms, each of which will consist of six
drilling platforms, six treating platforms (each with 36 wells),
two living quarters platforms and four injection platforms.

Abda'oe said the commitment made by the Japanese buyers will
accelerate the construction of the project, which was originally
planned to start commercial production in 2004.

"Next month our team will conclude negotiations with the
Japanese companies on the construction and financing of the
project," Abda'oe said.

Reliability

Pertamina's senior vice president for corporate affairs,
Baharuddin, told The Jakarta Post that the better-than-expected
response of Japanese buyers is based on the assumption that the
Natuna project will become a reliable supplier of LNG to Japan.

"Geographically, the Natuna processing site is also relatively
close to Japan, thereby assuring on-time deliveries," he said.

According to Abda'oe, Japanese demand for LNG will 15 million
tons per year by the year 2010, as compared to 10 million tons in
South Korea and seven million tons in Taiwan in the same year.

Indonesia currently exports 26.47 million tons of LNG per
annum, of which 18.69 million tons go to Japan, 5.42 million tons
to South Korea and 2.36 million tons to Taiwan.

Pertamina operates LNG plants in Arun, North Sumatra, and in
Bontang, East Kalimantan, and has a total annual capacity of over
28 million tons. (fhp)