Jakarta (ANTARA News) - State oil and gas company PT Pertamina believed the construction of the Donggi-Senoro liquefied natural gas plant in Banggai regency, Central Sulawesi, would be completed according to schedule in 2014.
Pertamina`s upstream director Muhammad Husen said in Jakarta Sunday work on the project, upstream and downstream, is running well.
"I have just returned from the location, and I noticed that work on the project both upstream and downstream is progressing well. I am therefore optimistic that the first shipment of LNG would be carried out in 2014," he said.
He said however there are some problems of land clearance especially in the upper reaches which will become the location of explorations and production.
In the meantime, land clearance in the downstream parts which will become the location of the plant had been secured.
Each part of the project, Husen said, is facing land clearance problems.
"But I believe that the team operating there would be able to overcome the problem," he said.
A similar statement was made by Vice President of Corporate Communications Mochamad Harun.
He said the Senoro project hopefully will start production in 2014.
"Some of the gas will be domestically used, namely for the power plant and fertilizers," he said.
The Senoro gas project covers the development of gas in Senoro-Toili block managed by a Joint Operating Body (JOB) of Pertamina and Medco and Matindok area operated by Pertamina.
The gas from the two fields will then be processed into liquefied natural gas at the Donggi-Senoro plant.
The Donggi-Senoro project is Indonesia`s first liquefied natural gas project using the upstream scheme.
Member of Commission VII of the House of Representatives of Golkar party faction Bobby A Rizaldi also hoped the Senoro project would be completed according to schedule.
He said Senoro project will be beneficial both for the state and local regions.
Bobby said the project will not only increase the income of the state, but also have a chain effect on economic growth of the region both in the supporting services sector and accessibility like airport expansion and better transportation.
According to calculations, assuming the project runs for 13 years and the price of crude oil is 70 US dollars per barrel, the state would earn 6.7 billion US dollars.
The project is estimated to provide employment to thousands of workers and to benefit hotels, food, and other services involving local businesses.
Other benefits of the project, he added, is allocating the gas to power plants near the location of the project, which would develop new industries.
With regard to land clearance, Bobby along with a number of other House commission VII DPR lawmakers had just visited the location of the project, and said the land which will be the upstream location of Senoro, some residents has asked for much higher prices compered to the project`s selling price of tax object.
"he said.
He said the problem of land clearance in the upper reaches must be overcome wisely with the local administration facilitating the Senoro plant as it is important for the welfare of the local population.
The LNG plant project in Senoro will have a capacity of two million tons per year.
PT DSLNG, as the plant`s operator, had signed a contract on the sale and purchase of LNG with the buyers for 13 years as of 2014.
The buyers are Chubu Electric Power Co Inc, Japan, with a volume of one million tons, Kyushu Electric Power Co Inc, Japan, 300,000 tons per year, and Korea Gas Corporation (Kogas) 700,000 tons per year.
The current DSLNG share holders are Sulawesi LNG Development Ltd 59.9 pct, PT Pertamina Hulu Energi 29 pct, and PT Medco LNG Indonesia 11.1 pct.
Sulawesi LNG Development Ltd`s shares are controlled by Mitsubishi Corporation 75 pct and Kogas 25 pct.
