Electric company threatens to back out of terminal deal

The Jakarta Post, Jakarta | Wed, 12/17/2008 3:28 PM 

The state electric company PT Perusahaan Listrik Negara (PLN) has threatened to withdraw from a consortium formed to construct a liquid natural gas (LNG) terminal, if the consortium alters its initial plan.

PLN, along with the state-owned gas and oil companies PT Perusahaan Gas Negara (PGN) and PT Pertamina, had agreed to established a consortium to build the terminal, slated to operate in 2012.

PLN director Fahmi Mochtar said Wednesday the company wanted to stick with the initial agreement, which was to construct an onshore three-million-ton capacity LNG terminal in Bojanegara, Banten.

"We have committed to that. If (other members of the consortium) decide to construct floating or mini-terminals, PLN would no longer take part," he said Wednesday, as quoted by Antara news agency.

PLN had agreed to help construct the terminal on dry land because the company could then set up a power generator nearby. "But if the plan's changed, we would have to reconsider what our benefit would be," he said.

The consortium is also still in disagreement over funding sources -- with project costs calculated at US$400 million -- and ownership. Fahmi said PLN was asking for equal equity among the members. 

With problems still outstanding, the project would likely experience delays,  he said. (dre)