Indonesian energy companies Pertamina and Medco Energi Internasional along with Japan’s Mitsubishi Corp are to begin building a liquefied natural gas refinery next year, the companies said.
Indonesia is energy-hungry Japan’s biggest liquefied natural gas (LNG) supplier. Tokyo has been seeking to secure its supplies from Jakarta, which has warned it cannot guarantee rolling over contracts expiring in 2010-11 due to growing domestic demand.
The Donggi-Senoro refinery on eastern Sulawesi island is expected to cost 2.01 billion dollars and will have capacity to refine two million tons of LNG per year, the energy and mineral resource ministry said in a statement.
The refinery is expected to start commercial operations in 2010 and will use reserves from the Senoro field operated by Medco’s unit, Medco EP, and from other fields in the Matindok block run by Pertamina EP.
LNG from the refinery will be shipped to Mitsubishi Corp in Japan. Mitsubishi holds a 60 percent stake in the project while Medco and Pertamina each have a 20 percent interest.
The refinery project was among four billion dollars worth of energy projects inaugurated Monday by President Susilo Bambang Yudhoyono and visiting Japanese Prime Minister Shinzo Abe.