Mitsubishi makes final decision for Donggi-Senoro LNG project

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Jan. 25 -- Mitsubishi Corp. announced that the partners in Indonesia’s Donggi-Senoro LNG project have made a final decision to invest in the $2.8 billion undertaking.

Mitsubishi said the project is being spearheaded by PT Donggi-Senoro LNG (PT DSLNG), a joint venture of Mitsubishi and subsidiaries of Indonesia’s state-owned PT Pertamina and PT Medco International.

By second-half 2014, PT DSLNG aims to produce and deliver 2 million tonnes/year of LNG, along with associated condensate of 47,000 boe/d.

PT DSLNG already has signed a heads of agreement for an LNG sales and purchase agreement with Chubu Electric Power Co. and Kyushu Electric Power Co, while negotiations are being finalized with Korea Gas Corp. (Kogas).

Mitsubishi said it will transfer its shares of PT DSLNG to a special purpose company (SPC), which will take over some of PT Medco’s shares as well, bringing its total stake in PT DSLNG to 59.9%.

Mitsubishi said Kogas will also be a partner in the SPC, making the project the first joint LNG project among Japan, South Korea, and Indonesia, and “opening up a new era of cooperation in the energy sector for these three nations.”

The partners in the SPC include Mitsubish 45%, PT Petamina 29%, Kogas 25%, and PT Medco Energi 11%.

Meanwhile, Mitsubishi said it has been coordinating the project’s development, marking the first time “a Japanese enterprise has taken the lead in planning and operations following an LNG plant’s construction.”

It said JGC Corp. is to build the plant on Sulawesi Island under an engineering, procurement, and construction contract.

The Japanese firm said the project’s scale should pave the way to the commercialization and practical use of remote, small- to medium-sized gas fields that have yet to be developed.

Mitsubishi said it hopes to leverage this project “into an increasingly stable supply of LNG to Japan and East Asia, and use it to enhance its expertise in the LNG business.”

The DS LNG project has been dogged by delays for several years.

The project stalled after Indonesia’s former Vice-President Jusuf Kalla said gas from Donggi and Senoro fields—which was supposed to feed the LNG plant—should be sold domestically instead of to Japan (OGJ Online, Mar. 8, 2010).

Contact Eric Watkins at hippalus@yahoo.com.



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