Negotiation on $34b gas liquefaction in Natuna finalized
Negotiation on $34b gas liquefaction in Natuna finalized
JAKARTA (JP): State Minister of Research and Technology B.J.
Habibie said yesterday the government has finalized lengthy
negotiations with Esso Natuna Inc. of the United States on a
US$34 billion natural gas liquefaction project in Natuna.
"There are no discrepancies between the two parties, the deal
is ready to sign," Habibie told reporters after meeting with
President Soeharto at the President's residence yesterday.
"Our last meeting with Esso Natuna's executives and lawyers on
Thursday showed both parties have successfully negotiated all key
issues," he said.
Minister of Mines and Energy I.B. Sudjana said recently that
the hard issues which made for lengthy negotiations, include the
concerns over royalties to be paid by Esso Natuna to the state
oil and gas company Pertamina, taxation, environment and local
contents.
Habibie said negotiations on all key issues have now been
completed. "We are now discussing plans to realize the project,"
he said.
He did not elaborate concerning royalties and tax tariffs to
be imposed on Esso Natuna, an affiliate of the U.S. company
Exxon.
Sudjana, at the inauguration of the new headquarters of the
state electricity company PT PLN on Thursday, declined to comment
to reporters on the planned royalties and taxation.
"It is impolite to announce the results of the negotiations
until they are reported to President Soeharto," Sudjana told The
Jakarta Post.
Habibie and Sudjana expressed optimism that the deal for the
natural gas liquefaction project in the Natuna Sea, 1,110
kilometers north of here and 600 kilometers northeast of
Singapore, will be signed during the official visit of U.S.
President Bill Clinton for the second informal summit of the Asia
Pacific Economic Cooperation in Bogor next month.
January
AFP wire service reported that Pertamina's President Faisal
Abda'oe said, at the opening of the Association of Southeast
Asian Nations oil committee conference in Manila yesterday, the
agreement on the project is likely to be signed in January, next
year.
The memorandum, to be signed while Clinton is in Indonesia
attending the summit, will be a preliminary to the signing of the
contract agreement, Abda'oe said.
Once the project is complete, it will be the largest
concentration of gas reserves in the world, capable of producing
up to 14 million tons of liquefied natural gas per year.
The project, 50 percent owned by Esso and 50 percent by
Pertamina, will have six treatment platforms, six drilling
platforms (each with 36 wells), two living-quarters platforms and
four injection platforms.
An earlier report said Esso has invested US$16 billion for the
initial development of the gas field in the Natuna bloc since its
first operation in 1980.
Pertamina has produced 25 million tons of liquefied natural
gas per annum so far from its plants in Arun, northern Sumatra
and in Bontang, East Kalimantan. All of the gas output is
exported to Japan, Taiwan and South Korea. (fhp)