State gas distributor PT Perusahaan Gas Negara (PGN) plans to build three liquefied natural gas receiving terminals with a total investment of US$1.78 billion.
President director Sutikno revealed the plan in a presentation during a hearing with the House of Representatives on Monday evening.
He said the three projects would be located in West Java, East Java and North Sumatra and LNG distribution networks would be formed around them.
The company plans to spend $650 million on the three-phase construction of a terminal in West Java with a total capacity of three million tons per annum (mtpa).
The North Sumatra and East Java terminals -- which will have a 4.5 mtpa combined capacity -- will cost respectively about $446 million and $574 million. Project funds will come from surplus capital and foreign loans.
Sutikno said the company would begin the projects in late 2008 and the work would be completed in North Sumatra in 2011 and in 2017 for East Java. The first phase of the West Java terminal, with a 1.5-mtpa capacity, is expected to be completed in 2012.
The company conducted feasibility studies in the second quarter of 2007 and will do so again in the second quarter of 2008.
"The LNG terminals will supply the gas in their respective regions, whose gas demands are expected to rise in the coming years," Sutikno said.
Currently, industries and households in West Java burn 1,112 million cubic feet of gas per day.
East Java has been experiencing a gas shortage since 2007, with supply dropping to 170 million cubic feet per day, as against some 400 million cubic feet in demand.
The gas distribution networks will cost an estimated $112 million. (uwi)
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