Petronas drops plan to build Donggi

Petronas drops plan to build Donggi

JAKARTA: Malaysia's state oil company Petroliam Nasional Bhd. (Petronas) will not build a liquefied natural gas plant in Indonesia as gas reserves at the proposed site fall short of requirements.

Petronas' plant in Matindok on Sulawesi island was intended as a base from where the fuel could be supplied to customers in the U.S. and Mexico, said Amril Adnan, head of exploration at Indonesia's state oil and gas company PT Pertamina, a partner in the project.

"Petronas only wants to participate if the Matindok block could be developed as an LNG project," he said on Thursday.

"We're still not sure whether the gas reserves are sufficient for the project." Petronas officials in Jakarta could not be reached immediately for comment.

Pertamina in May 2003 delayed marketing gas from Matindok's Donggi field after test wells showed less gas than estimated. The company said in 2002 the field may hold as much as 22 trillion cubic feet (tcf) of gas.

Pertamina proved 3.5 tcf of gas reserves at Donggi as of the end of 2003. The company said it needed to find at least 9 tcf of gas before it could start building a plant to liquefy the gas and begin marketing LNG. -- Bloomberg