Indonesian oil minister wants Donggi
gas for domestic market
Published: Aug 10, 2009
Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Aug. 10 --
“If I am part of the consortium, I will find domestic buyers
who can purchase gas with an economical price. If no buyers at home are
interested, I will report to the government,” said Minister for Energy and
Mineral Resources Purnomo Yusgiantoro.
“I think gas is more needed now due to an international
pressure for companies to use clean energy, so Pertamina
and Medco don’t have to be worried about buyers,” Purnomo
said, adding that the government would help the consortium to find buyers.
The Donggi-Senoro LNG consortium,
which also includes Mitsubishi Corp., signed a heads of agreement with Kansai
Electric Power Co. Inc. and Chubu Power Co. Inc. stipulating that each power
company would receive 1 million tonnes/year of LNG
from the plant for 12 years, starting in 2012.
However, the contracts and the project’s viability fell into
a state of uncertainty after
Medco, through its subsidiary PT Medco E&P, owns 50% of Senoro gas field, while Pertamina
owns the remaining interest. Pertamina owns 100% of Matindok gas field.
To give Pertamina and Medco time
to negotiate with the government, Chubu and Kansai extended the HOA several
times, with the last extension expiring at the end of July and no new agreement
in place.
"Yes, the agreements have expired,” said Hari Karyuliarto, Pertamina's head of LNG business, on Aug. 3. “Now, the
buyers can officially terminate their contracts at any time.”
Last month, Karen Agustiawan, Pertamina president director, said the firm was holding
talks with a small number of alternative buyers for the sale of LNG from the Donggi-Senoro LNG plant.
"We are in talks with fewer than three companies,"
she said, adding that all three potential buyers are from
Mitsubishi holds a 51% stake in the Donggi
LNG project, while Pertamina holds 29% and PT Medco Energi Internasional holds 20%.