Pertamina to get US$1.13b loan to build LNG plant
Pertamina to get US$1.13b loan to build LNG plant
JAKARTA (JP): State-owned oil and gas company Pertamina will
get a syndicated loan of US$1.13 billion to finance the
construction of its eighth liquefied natural gas (LNG) plant in
Bontan, East Kalimantan, the company said yesterday.
Pertamina president director Feisal Abda'oe said the loan
agreement would be signed in Paris next month.
Bank of Taiwan will act as an arranger of the syndicated loan,
which will also involve Chase Manhattan Corp., Banque Indosuez,
Fuji Bank and Mitsubishi Corp.
Pertamina has six LNG plants in Bontang --- plants A to F --
and its seventh, G plant, is under construction with an expected
annual capacity of 2.6 million tons of LNG.
G plant would raise LNG production at Bontang to 18.5 million
tons a year, Feisal said.
Pertamina needs an eighth plant to meet the demands created by
its new 20-year LNG sales contracts with Taiwan's Chinese
Petroleum and South Korea's Korea Gas Corporation.
According to the contracts, Pertamina must sell 2.84 million
tons of LNG to Taiwan and one million tons of LNG to South Korea
annually from the year 2000.
The construction of an eighth plant, called H plant, by local
contractors PT Inti Karya Persada Teknik and Bimantara, is
scheduled to start in March and be completed in November 1999.
The new plant is expected to become the world's largest LNG
plant with an annual capacity of 2.95 million tons of LNG a year.
Pertamina operates six other LNG plants in Arun, Aceh.
"Nine of the 12 LNG plants currently operated by Pertamina
have paid for their loans," he said.
Pertamina's director for general affairs, Baharudin, said
yesterday the company would negotiate a sales price for LNG from
Natuna island with Petrochemical Thailand at a meeting later this
month.
"There are still differences in the price of the gas even
though we have reached an agreement on sales volume," he said.
The representatives of both companies would meet in Bangkok
from Jan. 23 to Jan. 24, he said.
Pertamina was offering to sell the gas for US$3.1 for every
million million barrel thermal unit (MMBTU) while Petrochemical
Thailand wanted to pay $2.40 a MMBTU, said Baharudin who is also
head of the marketing team for Natuna gas.
He said Petrochemical Thailand had agreed to buy 400 million
cubic feet (12 million cubic meters) of gas a day when the gas
facility on Natuna island was still at an early stage of
production.
And it would buy one billion cubic feet (30 million cubic
meters) a day when the facility was at peak production.
If Indonesia and Thailand reach an agreement, the gas from
Natuna island would be piped to Thailand.
The pipeline is expected to stretch about 1,089 kilometers
from Natuna to Songkhla on the border of Indonesia and Thailand,
and continue for another 1,869 kilometers to Rayong in Thailand.
Another pipeline is to be built to pass through Sumatra to
Arun to supply the LNG plant there with natural gas.
The Natuna gas field is believed to have a reserve of about
222 trillion cubic feet (6.5 trillion cubic meters) of natural
gas.
Its gas has a high carbon dioxide content -- up to 71 percent
-- making processing there costlier than at the other fields in
Arun and Bontang.
Pertamina has signed an agreement with Esso Indonesia and
Mobil Oil to develop the Natuna gas field. (jsk)