Natuna plan must run as scheduled

Natuna plan must run as scheduled

JAKARTA (JP): President Soeharto said yesterday that the
multi-billion dollar gas liquefaction project in Natuna, Riau,
must proceed according to schedule.

"The mandate from President Soeharto is that all related
parties, including cabinet ministers and private companies
involved in the project, should help make it run on time," State
Minister for Research and Technology B.J. Habibie said after
attending the first plenary meeting on the Natuna project at
Merdeka Palace yesterday.

The plenary meeting, presided over by Soeharto, was attended
by the Natuna project's advisory team headed by Coordinating
Minister for Economy and Finance Saleh Afiff, and its management
team headed by Habibie. The meeting lasted for two-and-a-half
hours.

Habibie revealed that construction is scheduled to commence in
early 1997 and that the engineering and designing of auxiliary
facilities at the Natuna field has started.

The project, which will need a total investment of between
US$38.8 billion and $41.8 billion, will include 18 offshore
platforms and six gas liquefaction trains on Natuna island.

"Last month, I instructed the Agency for Technology Assessment
and Application to start mapping Natuna's sea beds," Habibie
said. The agency has also started mapping Natuna island.

At the meeting, Habibie was accompanied by Rear Admiral R.
Maryono, chief of the Natuna project's executive board, G.A.S.
Nayoan, coordinator of the gas field development, and Suleman
Wiradidjaja, coordinator of the supporting facilities.

Local firms

Habibie assured that the government was counting on the
participation of local private companies in developing the gas
extraction project.

"I don't care who owns the companies, as long as they are
incorporated in Indonesia, have experience and technology in the
gas field so that they can meet international quality standards,
offer competitive prices and accomplish jobs on time," Habibie
asserted.

Habibie explained that his party was still negotiating with
Japanese companies on the sales of liquefied natural gas (LNG)
from Natuna's first two production trains.

The first two trains, which will have a combined capacity of
five million tons of LNG per annum, are scheduled to start
commercial production by the year 2005.

Habibie added that his party was also seeking marketing
possibilities in South Korea and Taiwan for LNG from Natuna's
next trains. He added that by then Indonesia would face strong
competition from other countries, especially Middle Eastern
countries, Southeast Asian nations, the United States, Australia
and Russia.

"Therefore, it is important to accomplish this project on
schedule so that when the world market is flooded by LNG from
other gas fields, we have already secured our market with long-
term contracts with our traditional partners," Habibie said.

Indonesia is currently the largest producer of LNG in the
world, with a total production capacity of 22.2 million tons per
annum or 30.2 percent of the total capacity of the existing
liquefaction plants in the world. Indonesia's LNG comes mainly
from two gas fields, one in Aceh and the other in East
Kalimantan. Indonesia exports all of its LNG output to Japan,
South Korea and Taiwan.

The Natuna gas field, located 225 kilometers northeast of
Natuna island, is estimated to contain 222 trillion cubic feet of
natural gas. 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 LNG per year for 30 years.

Also on hand at yesterday's plenary meeting were Coordinating
Minister for Industry and Trade Hartarto, Coordinating Minister
for Political Affairs and Security Soesilo Soedarman, Minister of
National Development Planning Ginandjar Kartasasmita, Minister of
Home Affairs Yogie S. Memet, Minister of Finance Mar'ie Muhammad,
Minister of Mines and Energy I.B. Sudjana, Minister of Tourism,
Post and Telecommunication Joop Ave, Minister of Agriculture
Sjarifudin Baharsjah, Minister of Transmigration Siswono
Yudohusodo, Minister of Public Works Radinal Moochtar and
Commander of the Armed Forces Feisal Tanjung. (rid)