Jakarta – Indonesian state oil and gas company Pertamina said on Wednesday its liquefied natural gas (LNG) regasification and modified storage facility at the Arun plant in Aceh is on schedule to come online from 2014.
The hub will cost more than $80 million and include a 3 million tonne per year regasification unit and alterations to its current 600,000 cubic meter LNG storage facility.
“Our objective in building this LNG hub in Arun is for the energy security of Indonesia,” Salis Aprilian, senior vice president for engineering & operation management of gas at Pertamina, told Reuters.
“If we have LNG storage, we can supply gas anytime we need it,” he said, adding that LNG for the hub will be sourced from both domestic supplies and imports.
The LNG regasification plant will come online in 2014, followed by the modified storage facility in 2015.
Earlier this month, Indonesia signed its first LNG import deal, signaling the beginning of a sea change for a country that has been one of the top exporters of the fuel for decades.
The Arun plant, which is majority owned by Pertamina, with ExxonMobil and Japan Indonesia LNG Company also holding stakes, currently has six trains, five LNG storage tanks, and four liquefied petroleum gas storage tanks.
It currently processes natural gas into LNG, mostly for export, and while the new hub will be able to still feed export markets, it will focus on supplying rising domestic demand.
Indonesia, Southeast Asia’s largest economy, wants to tap its abundant gas supply and move away from oil as it grapples with record subsidy bills and a trade deficit resulting from costly fuel imports.
Although Indonesian LNG production is set to decline this year, with the country producing 318 cargoes compared with 332 last year, the country is keeping 29 cargoes for domestic use compared to 14 last year. (Reporting by Wilda Asmarini; Writing by Michael Taylor and Rebekah Kebede; Editing by Muralikumar Anantharaman)