Coastal, JSK form LNG partnership

August 1, 2016

Coastal Contracts has entered into a memorandum of understanding with PT. Jaya Samudra Karunia Internasional (JSK) for the acquisition of 49% interest in PT. Jaya Samudra Karunia Gas (JSK Gas), a company incorporated in Jakarta, Indonesia. JSK has a core business in the coal transportation sector in Indonesia. Given the huge potential in the Indonesian liquefied natural gas (LNG) market, JSK has ventured into the LNG supply chain as well.

Recently, it was awarded the LNG regasification and LNG storage contracts to support a 200 MWh gas-fired power plant in Bali, Indonesia by an Indonesian state-owned company. LNG regasification facilities generally fall into two main categories, fixed or floating. The joint venture will focus on the floating LNG regasification facilities, which is the floating storage regasification unit (FSRU) solution

FSRU solution is intended to meet the energy demands of an ever-changing global market. It is an innovative and ideal solution for safe, efficient and lower cost LNG transmission and storage as compared to a land-based terminal. This is also the most economical way of adding storage and regasification capacity to the local gas supply, where there are land constraints. There has also been emergence of FSRU seasonal charter as flexibility becomes the fundamental theme.

The acquisition also enhances Coastal’s capabilities by venturing into the LNG supply chain and moving further up the value chain in terms of technology, technical knowledge and expertise in the downstream sector. Furthermore, it also allows Coastal Group to diversify its earnings stream while simultaneously, diverging CCB’s risk profile from the Oil and Gas upstream sector. “LNG market is deemed as the current fastest growing market given its excellence in terms of cost efficiency as the use of LNG is very much cheaper than the other fossil energy sources,” said Ng Chin Heng, the executive chairman of Coastal Group.

Source : Aogdigital