Tokyo Gas, Pertamina Plan LNG Receiving Terminal In Indonesia

Tokyo Gas and Pertamina will build a LNG receiving terminal in Indonesia, Nikkei Asia review reported Tuesday.

The terminal, with a capacity of 200,000 to 400,000 kiloliters, will come up at Bojonegara, West Java and will cost around 100 billion yen ($810 million). It is expected to become operational in 2018, Nikkei said. The LNG will be sold to domestic factories and natural-gas-fired power plants.

This will be Indonesia's first purpose-built LNG receiving terminal. The two parties will set up a joint venture to run the import terminal. Mitsui & Co. is expected to take a stake in the company, with the Japan Bank for International Cooperation potentially participating as well, Nikkei reported.

It is the first step in a strategic LNG alliance between Tokyo Gas and Pertamina initiated with a memorandum of understanding signed in February.

In recent years, Indonesian domestic gas demand has jumped significantly amid declining production leading to rise in imports.