PT Badak NGL


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The history of LNG Badak will always become the part of Indonesian LNG industry history. It began when 2 natural gas reserves in extensive amount were found in 2 separate areas.


The areas are Arun Gas Field found by Mobil Oil Indonesia at the end of 1971, located in North Aceh, and Badak Gas Field, found by Huffco Inc., in early 1972, located in East Kalimantan. Both companies are working under production sharing contracts with The State Oil Company, Pertamina.


The fact that both gas areas are located very far from potential consumers whom consume natural gas in large scale. To meet the economic scale on project development, at early stage the 3 companies namely, Pertamina, Mobil Oil and Huffco agreed to develop LNG project which able to export natural gas in large quantity in liquid form.


This becomes a history because the 3 companies had not have any previous experience in LNG and LNG business has never been known. It was only 4 LNG plants in the world with only 3-4 years of operational experience, it is understandable why this project was initiated by an ambitious program with little confidence for potential LNG consumers.


Despite the above fact, painstaking months of hard work were conducted by Pertamina and its both partners whom tried to sell the project to two potential LNG consumers, potential financiers and also potential partners all over the world. Finally the effort was fruitful with an agreement of LNG sales contract on December 5, 1973, executed by 5 Japan buyers namely: The Chubu Electric Co., The Kansai Electric Power Co., Kyushu Electric Power Co., Nippon Steel Corp. and Osaka Gas Co.Ltd.



The contract which then known as The 1973 Contract was containing the commitments of the buyers to import LNG from Indonesia for 20 years, to be produced and supplied by LNG plant which has not yet been fully established. On the other side, Pertamina agreed to initiate its LNG supply in mid 1977 from 2 LNG plants to be constructed within 42 months. It was a challenge. In line with the plan to establish the LNG plant, it was planned to build tanker for transportation armada and several recipient terminals, including the schedule needed to arrange the financial support for these projects.


Certainly such projects must involve many companies, banks and financial institutions and the participation from government institutions from 3 countries namely USA, Japan and Indonesia. Each country has its own discretion to bring the plant into one objective that is to ship the Indonesian LNG to Japan. It is clear that the cooperation among all parties bears an essential meaning in supporting the project to success.


The History of PT Badak NGL for more than 30 years has proved that the Indonesian LNG has its own significance in maintaining a vision namely an intensive long term cooperation, which always becomes a fundamental aspect to achieve success.

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