Badak NGL's seventh unit starts production

Badak NGL's seventh unit starts production

JAKARTA (JP): The seventh unit (train) of PT Badak NGL Co. at
Bontang, East Kalimantan, has come on stream with an annual
production capacity of 2.3 million tons of liquefied natural gas
(LNG), the company's general manager, Suhadi, said over the
weekend.

Suhadi said in Bontang that the seventh unit, called the G
train, which was built at a cost of US$522 million, was ready for
an official opening by President Soeharto on Dec. 5.

"This new production train increases the Bontang LNG plant's
total capacity to 18.7 million tons a year," Suhadi said, as
reported by Antara.

Badak NGL is 55 percent owned by Pertamina, 20 percent by
Virginia Indonesia Co., 10 percent by Total Indonesia and 15
percent by Japan Indonesia LNG Co.

"We have also started building the eighth unit, called the H
train, with a designed capacity of 2.9 million tons a year, to
meet its future supply contracts with several buyers," he added.

The construction of the US$522 million G train was implemented
by local contractor PT Inti Karya Persada Teknik, owned by Timber
baron Muhamad (Bob) Hasan as the main contractor, with Chiyoda
Corp of Japan as subcontractor.

Inti Karya Persada Teknik was also the main contractor for the
sixth unit, the F train.

Pertamina needs the eighth unit to meet the 20-year LNG sales
contracts with Taiwan's Chinese Petroleum and South Korea's Korea
Gas Corporation.

The contracts require Pertamina to deliver 1.9 million tons of
LNG to Taiwan and one million tons of LNG to South Korea annually
from 2000.

Construction of the $1.13 billion H train is being made by PT
Inti Karya Persada Teknik in cooperation with a construction
division of the Bimantara Group, which is controlled by President
Soeharto's second son, Bambang Trihatmodjo.

The H train is scheduled to be completed in November 1999.

The new train will make the Bontang LNG complex the world's
largest single-site plant, with a total capacity of 21.6 million
tons.

Pertamina has secured $1.13 billion in syndicated loans from
seven foreign banks, under the so-called trustee borrowing
scheme, to finance the building of the H train.

Under the scheme, Pertamina raised offshore borrowings through
a trustee bank, Bank of America National Trust and Saving
Association. Under this arrangement, the loan would not be
recorded as part of Indonesia's foreign debts.

Pertamina, in a joint venture with Mobil Oil, owns and
operates six other LNG plants in Arun, Aceh, the northernmost
province on Sumatra island, with an annual capacity of 12 million
tons.

Indonesia, the world's largest LNG producer, exported 25.65
million tons last year to Japan, South Korea and Taiwan.

With capacity expansions at Bontang, and new discoveries of
gas reserves in Natuna, Riau, and Irian Jaya, Indonesia expects
to increase its LNG exports to more than 35 million tons per year
starting in 2003. (rid)