Pertamina Welcomes Government Decision to Convert Arun LNG Plant

abarrelfullabarrelfull wrote on 07 Nov 2012 13:11

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09 March 2012

PT Pertamina (Persero) welcomed the positive decision of the government through Minister of SOEs to speed up the Arun LNG plant utilization as for receiving terminal and regasification of LNG in order to meet the gas needs in Aceh and North Sumatra, whose needs are estimated to reach about 420 MMscfd in 2018.

Towards the decision, Pertamina have committed to perform a variety of effort to accelerate the implementation of the projects, which estimated to invest about U.S. $ 80 million out of the construction pipeline segment along the Arun-Belawan. This optimism believed could be more easily achieved, because in addition has received support from the government, Pertamina also has been intensively discussed the Aceh in cooperation with local enterprises.

"The refinery conversion project as the Arun LNG regasification and receiving terminal also Arun-Belawan development pipeline by Pertamina will happen faster because Pertamina and local enterprises have been undertaking this co-operation in Aceh. Such cooperation is a form of popular support and the Government of Aceh on it," said Pertamina Vice President Corporate Communications Mochamad Harun.

The purpose of asset conversion Arun is to support sustainable development in Aceh to revive the industry which has been suspended animation, such as PT Asean Aceh Fertilizer, PT Paper Kraft Aceh, Aceh Government Regional Company, maintaining the performance of PT Pupuk Iskandar Muda in a sustainable manner. This project could be utilized as a gas provider of infrastructure for PT PLN (Persero) and the industry in Medan and surrounding areas.

Arun capacity of 200 MMscfd in the early stages and could be increased to 320 MMscfd with an investment of Arun LNG conversion facilities for U.S. $ 73 million for capex and U.S. $ 4 million for opex. These costs are much cheaper than it would if the new building and the FSRU or lease the facility from other parties.

The project has completed the work of Front End Engineering Design (FEED) in June 2011 and various other studies at a cost of only about U.S. $ 400,000. Arun LNG receiving terminal and regasification expected onstream in June 2013.

Meanwhile, construction of Arun-Belawan pipe segment can be done more quickly because of PT Bina Marga, PT KAI, and Pertamina has conducted joint discussion of the use of some land roads and railway lines for the development / deployment pipeline Arun-Belawan. With this cooperation scheme are no longer for required land acquisition for the pipeline (right of way). Aceh Governor and Parliament gave full support to Pertamina to exploit Arun LNG Plant
As a receiving Terminal & LNG regasification, including for the construction of gas pipeline Arun-Belawan which is part of a package of asset utilization of the refinery due to the Arun gas pipeline construction, Belawan, industry and economy of North Sumatra, Aceh to be growing rapidly, other than that Aceh will become one of the energy barn that would ensure energy security and national electrical energy.
"The government and the Aceh parliament have been given a commitment to security matter for this project. The people of Aceh are fully support the gas pipeline construction activities and has achieved an agreement between Pertamina, representatives of the Government of Aceh, Keuchik, Community leader Aceh, Aceh Youth and Malikussaleh University in November 2011."

Parliament has also provided recommendations to Setwapres that Pertamina program to convert the Arun LNG Plant as Receiving Terminal & LNG regasification and pipeline construction Arun-Belawan to be implemented in the acceleration of industrial revitalization of Aceh and maintaining security and stability in Aceh. In addition to Ministry of Enterprise, Ministry of Finance has given approval to Pertamina on the project plan in September and is now Director General of State Wealth intensively discusses a lease agreement with Pertamina assets related to it.
"PIM, PLN and Pertamina are also extensively discussing the scheme of gas supply arrangements would be channel through the facilities of an LNG receiving terminal and pipeline Arun Arun-Belawan. Instead of in addition to energy security issues, the project is vital to support food security."

Arun LNG plant conversion into LNG regasification terminal and the receiver had carried out by Pertamina was also developed in a package with the conversion of the refinery as a hub for LNG and LPG Terminal so it could be more integrated energy infrastructure and national energy security will increase.

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