Pertamina, PLN team to build mini-LNG terminal in Indonesia

By Phaedra Friend Troy

Indonesian producer PT Pertamina has signed a joint venture agreement with state-owned electricity distribution company PT Perusahaan Listrik Negara (PLN) to cooperate in the development of a mini-LNG receiving terminal, as well as natural gas distribution infrastructure in eastern Indonesia.

Because eastern Indonesia is made of up many islands, the mini-LNG project is a better solution for the region because it cannot receive natural gas via pipeline.

A revitalization of the Joint Development Agreement signed between the two companies in November 2010, the mini-LNG project reaffirms Pertamina's commitment to guarantee energy supplies and energy security in eastern Indonesia.

In addition to supply natural gas to the region, the project is expected to reduce costs on electricity generation, as well as lessen government subsidy due to a rising fuel costs.

“I hope this is also a guarantee of security of gas supply in the PLN operation areas in eastern Indonesia and as part of more integrated gas business for the benefit of PLN," said Karen Agustiawan, president director of Pertamina.

In addition to generating electricity for PLN, the gas supply will also be used for power generation at the PT Aneka Tamang facility as a substitute for oil.

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