Govt to tender Natuna projects soon: Habibie

Govt to tender Natuna projects soon: Habibie

JAKARTA (JP): The government will tender the Natuna natural
gas development project on Oct. 1, State Minister of Research and
Technology B.J. Habibie said yesterday.

"President Soeharto has agreed on the master plan of the
Natuna development project which will be managed by BP3N (Natuna
Development Management Board)," he said at a hearing of House
Commission X on national development planning, population and
research and technology.

Habibie said the development project would begin in 1998 to
develop the island in the Riau archipelago into a center for
natural gas liquefaction and hightech industries.

He did not elaborate on the type of work contracts to be
tendered.

Habibie, who is also the chairman of the BP3N, said BP3N had
undertaken preliminary studies on the transportation system,
water resources and public facilities required for the project.

"We are aerial mapping the island, and planning a clean water
network," he said.

In a related development, the Business Times of Singapore
reported yesterday that British firms, such as engineering and
construction conglomerate Amec Plc. and London-based shipbuilder
Kvaerner, were interested in bidding for the Natuna development
contracts to be awarded later this year.

The Natuna gas project will be the largest gas field in
Indonesia. According to official data, the field is estimated to
contain 222 trillion cubic feet of natural gas. But only 75
percent of the gas is recoverable because of the high content of
carbon dioxide.

The field could yield up to 15 million tons of liquefied
natural gas (LNG) a year for 30 years.

As part of the Natuna gas project, Indonesia plans to build
two liquefied natural gas plants, which are expected to start
production in 2003 or 2004.

Indonesia is the largest producer of LNG in the world, with a
production capacity of 22.2 million tons a year or 30.2 percent
of the world's total production.

The country's LNG mainly comes from two gas fields in Arun,
Aceh, and in Bontang, East Kalimantan. Indonesia exports all of
its LNG output to Japan, South Korea and Taiwan.

Habibie said he could foresee no problem in marketing the
Natuna gas because Indonesia could rely on traditional markets in
Japan, South Korea and Taiwan. Thailand and China have also
expressed interest in the Natuna gas.

G.A.S. Nayoan, the vice president of the executive board for
the Natuna project, said in Singapore that Indonesia's liquefied
natural gas output was expected to increase by 10 million
tons a year to 30 million tons a year when production starts on
the Natuna gas field.

The Natuna D-Alpha project in the East Natuna Sea is planned
to come on stream in 2002, said Nayoan on Monday.

He said Pertamina was negotiating with a Japanese consortium,
which may take a 13 percent stake in Natuna gas project. He did
not identify the members of the consortium.

Exxon Corp has a 50 percent stake in the project and Mobil oil
has a 26 percent stake. Pertamina, Indonesia's state-owned oil
company, will eventually only hold an 11 percent interest.

Nayoan told Reuters that Pertamina met the Japanese consortium
earlier this month.

Negotiations are also underway with the Petroleum Authority of
Thailand (PTT) on a potential pipeline project to pipe gas from
the Natuna field to Thailand.

Nayoan told reporters that the initial phase of sales
contracts for Natuna gas have a pipeline gas option.

"This option calls for a 1,538 kilometer-long submarine
pipeline to Thailand, and could well be the first leg of a
Southeast Asian pipeline grid," he said.

Nayoan said PTT and Pertamina had made a "commitment" to the
project by signing a memorandum of understanding in August.

"Potential sales contracts for the gas can be made for a
period of 30 years," he said. (13)