Kalla Group to Build LNG Regasification Terminal in Bojonegara
Jakarta. Bumi Sarana Migas, an oil and gas company linked to the Vice President Jusuf Kalla, is set to build a Rp 10 trillion ($747 million) land-based liquefied natural gas receiving and regasification terminal in Bojonegara, Banten, as part of the strategy to anticipate gas deficit in the western part of Java, according to a statement on Monday (14/11).
According to the initial plan, the facility should be complete by 2019.
"We have a suitable location for the infrastructure project," Nanda Sinaga, Bumi Sarana Migas spokesperson, said.
According to Nanda, the company based its decision on an outlook by energy and Mineral Resources Ministry and Wood MacKenzie that said gas reserves will drop in the coming years following the depletion of reserves in Sumatra while demand increases. The spokesperson did not provide details on the outlook.
The location, which is owned by Kalla Group's subsidiary since 1990, has a suitable depth to dock the biggest LNG tankers — including Q-Flex and Q-Max — with a capacity of up to 266,000 cubic meters. An island nearby the location also protects the facility from strong currents.
The facility itself has the capacity of producing 500 million standard cubic feet per day (mmscfd) or about 4 million tons of gas per day.
Since 2013, the Kalla Group had searched internally for a partner to build the project. The group found a Japanese partner in 2015 who is expert in regasification facility management.
The company signed an initial agreement with state-run energy company Pertamina in 2015 to build the facility together. Pertamina is also expected to utilize 100 percent of the regasification facility for 20 years.
The regasification facility project will be funded by Bumi Sarana Migas, Pertamina and lending facilities from the Japanese state-owned financial service and Japanese banks.
Kalla Group, which has businesses in the automotive industry, infrastructure, property, energy and logistics is currently working on Poso, Toraja, Mamuju and Kerinci Jambi hydroelectric power plants.
With additional reportage by Reuters.
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