Indonesian firms and Mitsubishi to build LNG plant

Jakarta (ANTARA News) - Mitsubishi Corp. has agreed on a joint venture with Indonesia's state oil firm, Pertamina, and PT Medco Energi Internasional Tbk to build a LNG plant in Sulawesi, a Medco official said on Wednesday.

"We have signed a joint venture agreement and there will be further talks on gas supply," Hilmi Panigoro, president director of the Indonesian energy firm, was quotd by Reuters as telling reporters.

He said Medco would take a 20 percent stake in the liquefied natural gas plant, while Mitsubishi would hold 51 percent and Pertamina 29 percent.

He did not elaborate on the cost of building the plant.

A Pertamina official, who declined to be named, said the plant would receive natural gas from the Matindok field, operated by the state oil firm, and Medco's Senoro field. The fields have combined reserves of around 2 trillion cubic feet of gas.

The official said the plant would have an annual capacity of around 2 million tonnes of LNG.

Panigoro said he expected the plant to come onstream in 2011.

Indonesia is the world's second-largest producer of LNG after Qatar but production is expected to fall by 4 percent next year, while exports may fall even further as the country seeks to divert more gas to the domestic market.

Indonesia, Asia Pacific's sole OPEC member, has far more gas than oil and is trying to phase out costly oil-fired power generation and use more of its cheaper and cleaner natural gas domestically.

But it faces limited supplies due to long-term LNG export commitments, which it is reviewing.

The country is estimated to have gas reserves of around 182 trillion cubic feet.