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