Indonesia’s Pertamina has scrapped plans for an onshore regasification terminal at Bojonegara, west of Jakarta. The plan was unveiled in 2015, with a proposed start of 2019, although 2020 appeared to be a more likely commencement date. Company officials have said lower than expected gas demand has led to its cancellation.
Pertamina’s acting CEO, Nicke Widyawati, said the terminal, which would have been Indonesia’s second, would not go ahead, in a number of reports from a press conference on July 9. “It is not yet feasible to continue … Gas demand has declined, so it’s not feasible from a business standpoint,” the official was cited as saying by Reuters.
The vice chairman of a commission, Herman Khaeron, was quoted by Indonesia’s Kontan as saying that, of the plant’s 500 mmcf (14.2 mcm) per day capacity, only 50 mmcf (1.4 mcm) per day was required.
The plant would have required investment of around US$810 million. It would have had capacity of 4 million tpy. According to the plans, set out in 2015, the project would have involved Pertamina working with Bumi Sarana Migas, a subsidiary of the Kalla Group, while Tokyo Gas was due to provide engineering.
Kalla, in 2016, said Pertamina would take 100% of the regas capacity of the plant for 20 years. The company intended to fund the project with support from the Japan Bank for International Co-operation (JBIC).
Indonesia’s gas demand expanded by 2.6% in 2017, to 39.2 bcm, but coal consumption jumped 7.4%, to 57.2 million toe, according to BP’s statistics. While the outlook for gas is less strong than it had been, Pertamina’s CEO allowed that, should demand strengthen, the Bojonegra plan could be restored.
There are two offshore regas facilities in Indonesia, the 3.8 million tpy Nusantara and 1.8 million tpy Lampung, and one onshore plant, the 3 million tpy Arun. The latter plant was previously used for exports, with its last cargo leaving in October 2014.