Indonesia: beleaguered Donggi-Senoro LNG project taking flight after Jakarta sorted out the split between exports and domestic use
Jakarta decides on Senoro split
Indonesia has decided to allocate as much as 75% of the liquefied natural gas from the Donggi-Senoro project for exports, removing a long-standing roadblock that has held up the development of the gas fields since 2008.
Jakarta will retain 25% to 30% of the gas from the project on the Sulawesi Island for local buyers, Darwin Saleh, the nation’s energy minister, said in a mobile phone text message to Bloomberg last Friday.
“We are grateful the energy ministry has made a decision. Now we can proceed with the project,” Karen Agustiawan, president director of state player Pertamina, which owns a 29% stake in the project, said in a telephone conversation with Bloomberg.
The 2 million-tonne-a-year LNG plant was scheduled to be completed in 2014.
Work on the LNG plant has stalled on the disputes over the split between exports and domestic use.
Donggi-Senoro partners including Japan’s Mitsubishi, Pertamina and its compatriot, MedcoEnergi had planned to export the gas output to Japan.
However, Jakarta had insisted on selling the gas to domestic buyers.
The stalemate has seen Japanese utility outfit, Kansai Electric backing out of an gas offtake deal.
Kyushu Electric Power had since stepped in to fill the gap. Half of the project output is now contracted to the Japanese outfit and Korea Gas (Kogas), according to Pertamina’s head of LNG business, Hari Karyuliarto.
