Pertamina Arun plans in limbo

Pertamina: the state-run company is still awaiting approval from the government for its plan to turn the Arun LNG plant into a receiving and regasification terminal

The plans of state-run Pertamina to turn Aceh’s Arun liquefied natural gas plant in Indonesia into a receiving and regasification terminal are in limbo as it awaits approval from the government, according to reports.

The Jakarta Post cited the chairman of upstream regulator BPMigas, Hardiono, as saying Pertamina was yet to receive a response to a letter it had sent to the government outlining its plan for the LNG plant.

“The plant is a state asset therefore the approval for the conversion must come from the Finance Ministry. Discussions are still underway,” Hardiono was quoted telling reporters on Tuesday.

Pertamina released a statement on Monday saying it had made arrangements to proceed with the conversion and had made agreements to supply gas to state power company PLN and state fertilizer producer Pupuk Iskandar Muda, according to the Jakarta Post.

The government has already given approval for gas state-owned gas transmission company PGN to build a 140 million cubic feet per day capacity floating storage and regasification unit (FSRU) in Belawan, near the North Sumatra provincial capital of Medan.

However, the Post quoted Pertamina senior vice president for gas, Nanang Untung, as saying the conversion of the Arun plant would be a cheaper than building a new FSRU.

“The investment needed to build a re-gasification facility is only $80 million,” Nanang was quoted as saying, adding the capacity of the receiving terminal could be adjusted to meet demand in Aceh and North Sumatra.

Pertamina is hoping to start the pre-qualification tender for the Arun plant during the fourth quarter of the year and is targeting commercial production by June 2013.

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