Indonesia's state-owned petroleum producer Pertamina said Tuesday that it will build a liquefied natural gas plant with an annual capacity of about 2 million tons jointly with Mitsubishi Corp., The Nihon Keizai Shimbun reported in its Wednesday morning edition.
LNG produced at this facility is expected to be shipped to Japan, helping the country meet its energy needs.
Pertamina is pursuing natural gas development on the island of Sulawesi with a local company and has selected Mitsubishi as an investment partner for the LNG plant, according to an official. Total investment will be about $1 billion, with Mitsubishi's share estimated at $600 million-$800 million. Construction will begin as early as 2007, with completion targeted in 2009.
Three Japanese firms in the power and gas industry have already expressed interest in purchasing LNG from the new plant, and Pertamina says it intends to export this resource to such markets as Japan.
The plan is good news for Japan, which has seen LNG exports from top supplier Indonesia decrease in recent years due in part to depressed gas production.
Copyright (c) 2006 Dow Jones & Company, Inc.
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