Pasifik Agra Energi has committed an investment of over Rp 6.5 trillion (US$550 million) to build the first cryogenic energy-integrated LNG terminal in South Sulawesi, can you tell us a little bit about how this project came about?
One of the best ways to distribute the primary energy source in an archipelago is by LNG, it is clean, safe and efficient and if it is managed properly it can be very affordable.
Compared to the western part of Indonesia, the infrastructure in central and eastern Indonesia is less developed or less efficient. The electricity integration is still under development, and many of the small-medium sized power plants are still running on diesel fuel.
We have studied this situation for a while and have been considering the possibility of developing an LNG receiving terminal.
After about 6 months of study, we came to Bantaeng and monitored the industrial demand. We found out that Bantaeng will be a smelters concentrated industrial park, with huge industrial power demand.
After analysis of the demand, the sea condition and permitting/licensing process, we engaged with Bantaeng to discuss a potential project. In May 2016 and July 2016, we received the principal license for both the LNG Receiving Terminal and Power Plant. In February 2017, ENMP received the exclusivity letter to be the exclusive developer within the industrial estate.
Why was the location site, Bantaeng-South Sulawesi, chosen for the project?
Bantaeng is developing an industrial estate, mainly for nickel smelters. Two of the smelters are nearly completed and the other one is under construction. The potential demand is huge, and the existing projection is about 600MW. The anchor buyer is already in place. Location is ideal, in the south tip of Sulawesi Island, about 120km from Makassar and the water depth is ideal for a big vessel.
What are the current immediate priorities for the company and the project?
We have a good strategy to secure the off taker and strengthen the PPA by involving the Chinese stakeholders in this project. We have started the discussion and will hopefully receive the first report within the next few weeks.
Who will be providing the LNG/gas for the project?
We have had discussions with several LNG suppliers, we have gone through some good discussions, but we have not committed to any LNG producers/suppliers.
You are speaking at the 9th CWC LNG Asia Summit – Have you participated in the past and what are your expectations of the Summit?
I have delivered the papers in several events, and my expectation is to build my network, meet the gas producers and aggressive investors for future development.