Nusantara Regas to ‘Break Even in 5 Years’
Tito Summa Siahaan.
Nusantara Regas, a joint consortium between state energy company Pertamina and state gas distributor Perusahaan Gas Negara, expects to break even on its $400 million investment on gas facilities within five years, a director said on Tuesday.
Ari Adji, the technical and operating director of Nusantara Regas, disclosed that the current capacity utilization rate on its floating and storage regasification unit was enough to reach the break-even level. “Our current capacity utilization rate is around 30 to 50 percent,” he added.
The company also considered purchasing the FSRU, turning the facility into its own asset, the director said. “When our capacity utilization rate reaches 70 to 80 percent, then Nusantara Regas will be in a financial position to make the purchase,” he added. He did not say when it expected to reach that target.
He said Nusantara Regas pays around $190,000 per day to rent the FSRU from Golar Indonesia, an affiliate of London-based liquefied natural gas shipping company Golar Energy LNG. “The contract will end in 2022 and it also includes an option to purchase the FSRU,” Ari said.
Established in 2010, Nusantara Regas is 60 percent owned by Pertamina, with the remainder held by PGN. It is responsible for the day-to-day operation and management of the FSRU, which is located off Jakarta Bay. Ari said that Nusantara Regas is expected to grow strongly because the company’s approach is more efficient than alternative methods in gas distribution.
The method used by the company involves natural gas being transformed into LNG, shipped to the Nusantara Regas facility and returned to its original state.
By transforming gas into liquid, the compression ratio can be as much as one six-hundredth, Ari said. “Furthermore, given Indonesia’s geographical condition as an archipelagic country, shipping gas is cheaper than building a pipeline,” he said.
Ari added Nusantara Regas would generate less than $3 per million British thermal units in revenue for its services.
President director Hendra Jaya said his company was considering purchasing gas from the United States.