Sep 7, 2009

Indonesia Tangguh begins trial at train 2

Indonesia's Energy Minister said trial runs at the second LNG train at the Tangguh project began last week and the first train would resume operations by the second week of October at the latest.

The Tangguh LNG plant in Papua, led by BP's Indonesian unit, started up this year but was temporarily shut in August to resolve technical problems.

"Second train commissioning started. Trial runs are on," the minister, Purnomo Yusgiantoro, told Reuters in an interview.

Indonesia's oil watchdog BPMIGAS said last week the LNG plant, which has a capacity to produce 7.6 million tonnes per year (tpy) via two trains, will ship only 16 cargoes of liquefied natural gas in 2009, well short of its previous estimate of 56 cargoes.

BPMIGAS monitors oil and gas firms operating in Indonesia.

Indonesia, the world's third-largest LNG exporter after Qatar and Malaysia, plans to use more natural gas at home to avoid costly oil prices as its own oil reserves dwindle.

Yusgiantoro said fertiliser customers had placed a request for 0.5 million tonnes of LNG from Donggi-Senoro project and the remaining 1.5 million tonnes was yet to be sold.

He said the promoters were still negotiating price and financing of the project.

The Donggi-Senoro project, which will require $1.7 billion for upstream activities and $2 billion for downstream, has been under threat since Vice President Jusuf Kalla said in June gas from the project should be sold to the domestic market.

Yusgiantoro said Indonesia, the world's largest thermal coal exporter, would export 150 million tonnes of coal annually from 2015. It exported 140.35 million tonnes of coal in 2008.

"We will increase it by 20 million tonnes to 30 million tonnes per year up to the level that it can be massively exported," Yusgiantoro said. Currently, Indonesia uses 40 percent of its output locally and exports the rest.

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