Inpex to start building Indonesia LNG plant in 2011
Indonesia expects Japan's Inpex Corp to start construction of a $10 billion floating liquefied natural gas (LNG) plant next year in the Timor Sea, Indonesia's energy watchdog BPMIGAS said on Thursday.
The plant is expected to come onstream in 2016 with initial production of 4.5 million tonnes per year of LNG from the Inpex-operated Abadi gas field, which is estimated to have over 10 trillion cubic feet (tcf) of gas reserves.
"Some of the LNG will be exported and some for the domestic market," said Elan Biantoro, a BPMIGAS spokesman.
Indonesia, the world's number-three LNG exporter after Qatar and Malaysia, is increasing its use of energy sources such as natural gas to reduce oil use because of high prices and dwindling domestic supply.
Last year, Indonesia in principle agreed to the Inpex proposal and said it was considering the economic value of a floating LNG plant, which it originally estimated could cost $19.6 billion. An Inpex official later estimated the cost at closer to $10 billion.
"The floating LNG plant is more efficient compared with an onshore plant. There would be a high risk of problems if we built the plant onshore," Biantoro said.
If the gas reserves are confirmed, it would make the project the second-biggest new Indonesian gas field after the Tangguh project in Papua, which has combined reserves of 14.4 tcf.
Thursday 19 Aug 2010
Reuters
