Indonesia looking to import from Arun LNG production terminal

Indonesian government linked company PT Rekayasa Industri was chosen as a contractor of engineering, procurement and construction for a project to convert Arun LNG plant into a receiving terminal. Pertamina has developed the project and invited competing bids in April 2012. Finally it selected Rekayasa among the five participants.

However, it will need more time for Pertamina to sign formal EPC contract with Rekayasa. Pertamina plans to procure LNG for Arum receiving terminal from Tangguh LNG Project but has not yet reached an agreement with the government on the supply quantity from the project.

Meanwhile, Pertamina is expected to supply 140 million standard cubic feet per day of re gasified LNG from Arun terminal to the state owned electric utility PLN, but it has still been negotiating with the government on its sales price.

For this reason, Pertamina is still unable to conclude the contract with Rekayasa and will focus on settling the negotiations with the government first of all.

Pertamina is planning to convert Arun LNG production terminal into a LNG receiving terminal with send out capacity of 400 million standard cubic feet per day by June 2013.

After the Arun Belawan pipeline is built, the terminal is expected to become a gas supply hub to cover the whole of North Sumatra Province.