4Gas, Petrogas to jointly develop LNG terminal

The Jakarta Post, Jakarta

Rotterdam-based liquefied natural gas (LNG) terminal developer and operator 4Gas and local energy company PT Petrogas plan to build an LNG terminal in East Java following the signing of an agreement by the two firms on a feasibility study for the project.

PT Petrogas is wholly owned by the East Java provincial administration.

According to a release, the memorandum of understanding (MOU), signed on Tuesday, allows the two firms to conduct the joint feasibility study, which will also determine whether they should build a terrestrial (fixed-based) or floating LNG terminal in the gas-starved province.

"Following our LNG terminal projects in the UK, the Netherlands, France, Canada and the U.S., we are now concentrating on projects in Asia.

"And Indonesia is one of the largest economies in Asia, and has a lot of promise," 4Gas executive director and general counsel Harry Van Rietschoten said in the statement.

Abdul Muid, Petrogas president director, said, "This is a landmark agreement that will allow economic and industrial development in East Java to continue.

"Without additional gas from domestic and possibly foreign sources, scope for the expansion of our industries will be seriously curtailed."

East Java is one of the regions in the country that is vulnerable to a gas shortage, alongside East Kalimantan, East Java and North Sumatra.

Data from the Energy and Mineral Resources Ministry shows that the national gas balance for this year, which describes the gas supply and contractual gas demand position, will experience a deficit of 0.3 billion cubic feet (bcf).

Abdul said the planned terminal, which will also be able to be used to store natural gas supplied from overseas, would help minimize the risk of an energy crisis in East Java and other parts of Indonesia.