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)