Development of Indonesia’s 4th liquefied natural gas (LNG) plant, Donggi Senoro, receives approval from government official.
After delay following a government decision ruling out export of goods, the facility faced financial uncertainty. However, fears have been quelled somewhat by reassurance from Raden Priyono, Head of Indonesia’s upstream oil and gas regulator BPMigas. Priyono stated that the project had met all agency requirements, and was now only waiting final approval from Indonesia’s Vice-President Boediono.
The recent statement revises former Vice-President Jusuf Kalla’s edict to restrict plant distribution to domestic buyers. Priyono’s preliminary guarantee also reverses a similar statement made in March by the Indonesian Energy and Mineral Resources Minister, Darwin Zahedy Saleh.
The proposed facility has secured several export routes. Japanese company, Chubu Electric Power, made a preliminary agreement to buy half the annual production capacity, 1million tonnes for 12 years. Similarly another Japanese group, Kyushu Electric Power and the South Korean company, Kogas anticipated respective yearly purchases of 0.3m t/y and 0.7m t/y over a 15 year period.
Nevertheless all initial deals may be withdrawn, particularly if uncertainty surrounding the project continues. Further pressure has been added as projects in Papua New Guinea, Australia and Qatar become more attractive.