Local firm to build another LNG train unit in Bontang
Local firm to build another LNG train unit in Bontang
JAKARTA (JP): Following approval of a repeat order by President Soeharto, PT Inti Karya Persada Tehnik, a major private engineering firm, will start to construct the seventh LNG production unit in Bontang, East Kalimantan, in March.
"We are waiting for approval from the government on our proposal on the construction costs of the seventh liquefied natural gas production unit, to be called Train-G," the company's president, Raysoeli Moeloek, said here yesterday.
"We expect that the approval will be issued next week by Coordinating Minister for Economy and Finance Saleh Afiff," Moeloek told reporters after a ceremony for the presentation of a new ambulance by the company to a public health center at Lintau Buo in Tanah Datar regency, West Sumatra, at the company's headquarters here.
Moeloek refused to elaborate on the proposed cost of the construction of Train-G, but said that it should cost less than Train-F, the sixth production unit. He said Train-F, which was completed by the company in November 1993, cost US$524 million.
Train-G is designed to produce 2.3 million tons of liquid natural gas per year. The Bontang LNG industrial complex, with its six existing trains, now produces over 13.8 million tons of LNG per annum.
Moeloek said his company is offering a lower cost for Train-G because some of the infrastructure, including the gas pipelines, will use the facilities of Train-F.
"But, another important cause for the lower offering is because we will use many more local materials in the project," he said.
He estimated the local content of the planned project to exceed 50 percent, as compared to 40 percent for Train-F.
He said Train-G is expected to be on stream in November 1997.
Financing
When asked about the financing of the construction of Train-G, Moeloek said the state oil company Pertamina, the owner of the project, is expected to obtain credit from syndicated foreign banks.
Pertamina's president, Faisal Abda'oe, said last month that the Export Import Bank (Exim) of Japan will be one of its financial arrangers. The bank was one of the syndicated banks to finance the construction of Train-F.
Moeloek told The Jakarta Post yesterday that the company, controlled by timber baron Mohammad (Bob) Hasan, will likely assign Chiyoda Corp. of Japan as one of its project sub- contractors.
"With Chiyoda's assistance, our company has now become a strong self-reliant company, which has received ISO-9000 and ISO- 9001 standardization certificates," he said.
Moeloek said that in cooperation with Chiyoda, his company is now completing another natural gas liquefaction project in Qatar with an investment of $800 million.
PT Inti Karya Persada Tehnik, owned by five domestic businesses, Nusamba Group, PT Wijaya Karya, PT Prama Matra Widya Engineering, PT Jasa Ferrie Partners and PT Rakintam Nusa, is now one of only six contractors worldwide capable of constructing LNG production plants. The other five contractors come from Japan, France and the United States.
In addition to the six existing LNG units in Bontang, Pertamina also operates six others in Arun, Aceh, with a total capacity of over 12 million tons a year.(fhp)