Mitsubishi Corp., Japan's largest trading company, and PT Pertamina will seek $800 million in loans to develop Indonesia's fourth liquefied natural gas plant.
The companies and PT Medco Energi Internasional plan to build the plant on Sulawesi Island at a cost of $1.2 billion, Frederick Siahaan, finance director of state-owned oil company Pertamina, told reporters Friday in Jakarta.
The plant, with an annual production of 2 million tons to be sold to Japan, may help the world's second-biggest economy secure energy supply as shipments from Indonesia's existing LNG facilities decline. The three companies expect to select the investment banks this year and raise the funds early next year, Siahaan said.
Mitsubishi will own 51 percent of the LNG plant, Iin Arifin Takhyan, vice president of Pertamina, said Aug. 2. Pertamina will take 29 percent, while Medco will own 20 percent.
The LNG plant will be fed by two fields in Sulawesi. The Senoro field, equally owned by Pertamina and Medco, has proven reserves of 1.4 trillion cu. feet of gas. The nearby Matindok area, owned by Pertamina, has 700 billion cu. feet of proven gas.
LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transport by tanker to destinations not connected by pipeline.