DSLNG provides an opportunity to develop gas reserves that have been stranded for many decades. The initiatives have come from Indonesia`s national energy company PT Pertamina (Persero) and PT Medco Energi Internasional, Tbk., together with international companies, namely Mitsubishi Corporation and Korea Gas Corporation.
The DSLNG plant is located in the Banggai Regency in the Province of Central Sulawesi and is situated about 45 km south-east of Luwuk, the main town of Banggai Regency.
The plant site comprises about 100 hectares of land along the coast facing the Peling Strait, which provides a deep-sea route from Surabaya and Makassar to Luwuk and Manado.
DSLNG was established as a foreign investment company on 28 December 2007, with shares owned by Pertamina Energy Services Pte. Ltd. (29%), PT Medco LNG Indonesia (20%), and Mitsubishi Corporation (51%). Since February 2011, however, the ownership structure has changed to PT Pertamina Hulu Energi (29%), PT Medco LNG Indonesia (11.1%) and Sulawesi LNG Development Ltd. (59.9%).
DSLNG is the first Indonesian LNG project developed as a “downstream business activity” based on Law No. 22 of 2001, which enables separate development of upstream (feedstock gas supply) and downstream (LNG manufacturing) businesses.
A downstream LNG development model benefits the country as it shifts the investment and the associated risks of the LNG plant development from the Government of Indonesia to a downstream company.