The journey of Badak LNG begins with the discovery of extensive amount of natural gas in two separate areas. The first area located at Arun Gas Field, North Aceh, was discovered by Mobil Oil Indonesia in late 1971 whereas the second area, the Badak Gas Field, East Kalimantan, was found by Huffco Inc. in early 1972. Both companies are working under Production Sharing Contracts with Indonesian State-owned Oil, Pertamina.
At that time LNG business was not well known and there were only four LNG plant around the world with 3-4 years of operation experience. Although without prior experience in the field of LNG, Pertamina, Mobil Oil, and Huffco Inc., agreed to develop an LNG project that can export large quantities of liquefied natural gas.
As history has shown, this project is based on optimism and strong ambitions with confidence in the strength of market demand. Months of painstaking hardwork have been taken by Pertamina, Mobil Oil, and Huffco Inc. to sell the project to two potential LNG consumers, potential funders, and potential partners around the world. The effort finally came to fruition with the approval of an LNG sales contract on five Japanese companies: Chubu Electric Co., Kansai Electric Power Co., Kyushu Electric Power Co., Nippon Steel Corp. and Osaka Gas Co. Ltd., on December 5, 1973.
The contract later known as "The 1973 Contract" contains the commitment of buyers to import LNG Indonesia for 20 years, at which time the LNG plant has not been completed. Meanwhile, in mid-1977 Pertamina has agreed to supply LNG from two LNG plants to be built within 42 months. With the establishment of LNG plant, the construction of tankers for transportation fleets and the construction of several receiving terminals, including financing arrangements for the projects and then should be implemented simultaneously.
Due to the cooperation of various parties, this great project also succeeded. This certainly shall not be separated from the support of foreign companies, banks, financial institutions and cooperation of three countries: Indonesia, Japan, and the United States. Based on optimism, ambition and hard work together, historical records have been scrawled Badak LNG has been listed as the spearhead of the history of the Indonesian LNG industry.
PT Badak NGL for more than 4 decades has contributed considerably in the international gas industry so that PT Badak NGL has been known as a trustworthy and reliable professional Operating Organization company.
LNG Business Supply Chain
The supply chain in the LNG business of PT Badak NGL starts from the extraction of gas from wells operated bu gas producers. For PT Badak NGL, the gas is obtained from Muara Badak and supplied by ENI Muara Badak BV, PT Pertamina Hulu Mahakam, ENI East Sepinggan Ltd, Chevron Rapak Ltd and PT Pertamina Hulu Sanga-sanga. Gas from these producers is then owed through pipelines into gas processing facilities.
Gas that has been liquefied (LNG) is then transported by ship and ISO tankers in accordance with the contract specifications of the buyer, to the receiving terminals at buyer's destination. The buyer undertakes regasification of the LNG it receives, before distributing it to end users.