Japanese bank to fund LNG plant in E. Kalimantan
Japanese bank to fund LNG plant in E. Kalimantan
JAKARTA (JP): The Export-Import (Exim) Bank of Japan will provide a loan to finance 70 percent of the total costs to construct a $969 million liquefied natural gas (LNG) plant in Bontang, East Kalimantan, an executive says.
"We expect the loan agreement to be signed in the middle of this year after negotiations on another loan for the remaining 30 percent of the total project costs with some foreign commercial banks are completed," the president of the state oil company Pertamina, Faisal Abda'oe, told reporters after an Idul Fitri gathering here yesterday.
Pertamina is the owner of the planned gas liquefaction plant, which will be called Train-G.
Abda'oe also said, though not in detail, that at least 17 foreign commercial banks are showing interest in partially financing the remaining 30 percent of the project costs.
According to Abda'oe, the loans for the project will have a maturity of around 10 years and carry a favorable interest rate.
He said that Train-G, with a processing capacity of 2.3 million tons per annum, will be constructed by PT Inti Karya Persada Teknik (IKPT), a private engineering company controlled by timber baron Mohammad (Bob) Hasan.
Abda'oe acknowledged that the costs of Train-G will be much higher than those for Pertamina's sixth LNG plant in Bontang, called Train-F, because the costs for the former will include the construction of loading facilities.
Train-F, which started commercial production in January 1994, was also constructed by IKPT at a cost of $524 million.
Buyers
Pertamina's director for general affairs, Baharudin, told The Jakarta Post yesterday that most of Train-G's output will be shipped to customers in Japan beginning in 1997 under a long-term agreement.
When asked about the price for Train-G's LNG, he said that it would likely be set 10 percent higher than the current prices for Japanese buyers.
Pertamina's LNG prices for Japan were set at $3.13 per million British thermal units (BTU) in March last year, $3.05 in April and $3.11 in May, while its prices for South Korea were about $2.90 to $3. One ton of LNG is equivalent to 51.87 million BTU.
Pertamina currently operates six LNG plants in Bontang and another six in Arun, Aceh, with a total production capacity of over 25 million tons per annum.
The company is committed to annually exporting 18.3 million tons of LNG to Japan, 5.6 million tons to South Korea and 1.7 million tons to Taiwan. (fhp)