A consortium of state firms has confirmed the construction of a 38 million offshore liquefied natural gas (LNG) storage terminal north of Sumatra.
The consortium, consisting of PT Pertamina, PT PLN and PT PGN, has agreed plans to go ahead with the terminal, set for operations by the end of 2011.
The new LNG terminal is expected to supply two of the regions power plants, both owned by state electricity firm PT PLN. The terminal is projected to ease the domestic demand for power and reduce the consumption of its dwindling crude oil reserves by offering alternative sources of energy such as natural gas and coal.
PT PGN has already secured LNG supplies of 1.5 million tonnes per year from East Kalimantan to supply the proposed terminal from 2011 onward.
The consortium is anticipated to begin building the terminal this year, with the facility expected to store as much as 4 million tonnes of gas per year.