From Government of Indonesia

Investors Sought for Bontang Coal Plant

Indonesia is seeking investors to build a plant to supply coal steam to the Bontang liquefied natural gas (LNG) facility that uses natural gas to generate electricity, Mines and Energy Minister Purnomo Yusgiantoro said on Thursday (9/11/06).

The move aims to boost LNG production in Indonesia, the world's top LNG exporter, which has failed to meet its contractual commitments to traditional buyers such as Japan, South Korea and Taiwan because of a slump in production.

"We need to replace gas used at the power plant with coal steam. We will process that gas to become LNG," Yusgiantoro was quoted as saying by Reuters.

Separately, Yoga Suprapto, president director of PT Badak, said about 300 million cubic ft per day of gas are burned to generate power at Bontang plants.

"If we replace that gas with coal steam then we can process an additional 21 cargoes of LNG per year," Suprapto said. "We will open a tender soon to build that coal steam. We expect the coal steam plant will be on stream in 2009."

Another Badak official, who declined to be identified, said Bontang LNG will produce 316 cargoes of 125,000 cubic m each of LNG in 2006 and 310 cargoes in 2007. The official said Indonesia has a contractual obligation to sell 365 cargoes of LNG from Bontang each year.

French oil group, Total is the main supplier of gas, delivering about 2.6 billion cubic ft per day to the Bontang LNG plant in East Kalimantan. Other suppliers are Chevron Corp and Vico Indonesia. Vico's shareholders include BP Plc and Italian energy group Eni SpA. Both supply about 800 million cubic ft per day of gas.

Badak, which operates the Bontang LNG plant, is 55% owned by state oil firm PT Pertamina. Vico has a 20% stake, Total 15% and a consortium of Japanese firms 10%.
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