Mitsubishi-led LNG project in Indonesia may be shelved

The Japanese-led consortium seeking to build the Senoro LNG plant in Central Sulawesi, Indonesia, may have to delay its plans due to lower reserves of natural gas in the Senoro and Matindok fields than earlier estimated.
"We are now waiting for the operators to decide whether they still want to develop the project with the lower proven reserve," said Indonesia's Energy and Mineral Resources Minister Purnomo Yusgiantoro, in reference to the consortium comprised of state-owned Pertamina (Persero), Medco E&P, and Mitsubishi.

Purnomo, who said upstream oil and gas regulator BP Migas also would discuss the matter with the consortium, announced Indonesia's state-owned oil and gas research and development centre (Lemigas) had found reserves in the fields to be lower than the consortium's estimate of 2.4 tcf.
The minister did not detail Lemigas' findings, saying the institution "might" publish its results later on. But ministry adviser and former BP Migas chairman Kardaya Warnika said the lower proven gas reserves meant the LNG plant could not meet its initial production target.

"Lower proven gas reserves means less LNG production," said Kardaya. "Thus the plant may not be able to meet its initial production target of 2 mm tpy of LNG."
The Senoro LNG project came under public scrutiny when LNG Energi Utama (LEU) last August filed a lawsuit against Mitsubishi over claims the Japanese firm had unfairly won the project. LEU, which claims exclusive rights to be involved in the Senoro LNG project, filed its lawsuit with Indonesia's Business Competition Supervisory Agency, which still has the case under review.

Mitsubishi holds a 51 % stake in the Senoro LNG project, while Pertamina holds 29 % and Medco E&P holds 20 %.