Badak LNG

Badak LNG, formally PT Badak Natural Gas Liquefaction and commonly known as PT Badak NGL or LNG Badak, is an Indonesian liquefied natural gas company and processing complex in Bontang, East Kalimantan. It was created to process gas from the Muara Badak area, including the Samberah, Nilam, and Mutiara fields, into LNG for export and into associated natural-gas products. The name Badak derives from the Badak gas field and the Muara Badak region rather than from a consumer brand or a separate international energy corporation. The project emerged after Huffco, now associated with VICO Indonesia, discovered a major natural-gas accumulation in the Muara Badak complex in February 1972. At a time when the LNG industry had limited operating experience, Pertamina, Mobil Oil, and Huffco pursued an export project and sought overseas buyers, financiers, and technical partners. Their efforts resulted in a December 1973 LNG sales agreement with five Japanese utilities and industrial companies: Chubu Electric, Kansai Electric Power, Kyushu Electric Power, Nippon Steel, and Osaka Gas. PT Badak NGL was incorporated on November 26, 1974, by Pertamina, VICO Indonesia, and JILCO to operate the project. Construction of the first processing unit, Train A, took approximately 36 months. The plant was completed in July 1977, inaugurated on August 1, and made its first LNG shipment on August 9, 1977, aboard the LNG Aquarius for delivery to Senboku, Japan. The Bontang complex subsequently expanded from its initial two trains to eight process trains, designated A through H. At its reported design scale, the eight-train plant has LNG capacity of approximately 22.5 million metric tonnes per annum. The complex also developed LPG facilities and an extensive pipeline system connecting gas supply sources with the processing facilities. Badak LNG became one of Indonesia's most important LNG export operations and a major contributor to economic activity in Bontang and to Indonesia's petroleum and gas sector. Its principal commercial function is the treatment, liquefaction, storage, and shipment of natural gas, although the company has also provided operational knowledge, training, commissioning assistance, and technical support to other LNG projects. The plant's production profile changed substantially after 2001 as available feed gas declined and government policy redirected some gas toward domestic fertilizer production. LNG cargoes fell from 379 in 2001 to 341 in 2005, and the company could no longer consistently meet earlier buyer commitments. LPG production was temporarily suspended from 2006 because of reduced gas availability, then resumed in 2009 with reported output of 435,518 tonnes. LNG production in 2009 was reported at 17,375,053 tonnes. From 2011, the complex was reported to be operating four trains, rather than all eight original trains, reflecting feed-gas constraints. Badak LNG has also positioned itself as a center of Indonesian LNG expertise. In 2011 it helped establish the LNG Academy with Jakarta State Polytechnic, adapting training facilities for higher-education and professional instruction. It has worked with Indonesian universities on natural-gas education, enterprise-resource-planning implementation, refinery digitalization, engineering, business management, and vocational training. Through its Corporate Strategic Planning and Business Development function, the company has extended technical assistance, operator training, field support, and startup assistance to domestic and overseas LNG projects. Named external clients and collaborators have included Pertamina Gas, Tangguh LNG, Donggi-Senoro LNG, Angola LNG, Cameroon LNG, Mozambique LNG, Yemen LNG, Mitsui Chemicals, Chiyoda, and Dominion Cove Point LNG. Badak LNG therefore represents both a physical LNG plant and a body of Indonesian process-technology and operating expertise.

Badak LNG developed from the discovery and commercialization of the Muara Badak natural-gas complex in East Kalimantan. Huffco, an oil and gas contractor working under a production-sharing arrangement with Pertamina and now associated with VICO Indonesia, discovered a major gas accumulation in February 1972 in the Samberah, Nilam, and Mutiara fields. The discovery followed the identification of other major Indonesian gas resources and encouraged the development of an LNG export industry in Indonesia. The project was ambitious because LNG technology and commercial practice were still relatively young. Pertamina, Mobil Oil, and Huffco sought buyers, project partners, and financing for a large-scale liquefaction operation. On December 5, 1973, they secured a long-term sales arrangement involving five Japanese customers: Chubu Electric, Kansai Electric Power, Kyushu Electric Power, Nippon Steel, and Osaka Gas. This agreement created the commercial basis for the Bontang project. PT Badak NGL was incorporated on November 26, 1974, with Pertamina, VICO Indonesia, and Japan Indonesia LNG Co., Ltd. as shareholders or participating partners. Construction began on the same date. The first processing train, Train A, was completed after roughly three years, on July 5, 1977. The facility was inaugurated on August 1, 1977, and the first LNG cargo left Bontang on August 9 aboard the LNG Aquarius, bound for Senboku in Japan. The Bontang complex expanded over the following decades. What began with a smaller number of trains eventually grew to eight parallel LNG process trains, labeled A through H. The site also added LPG production capability and developed multiple large-diameter pipelines to bring gas from producing fields to the plant. At its expanded scale, the complex was described as capable of producing approximately 22.5 million metric tonnes of LNG annually, placing it among the world's largest LNG facilities and making it one of Indonesia's principal gas-processing operations. The plant's later history was shaped by declining feed-gas availability. LNG production reached its historical high around 2001, when the operation handled 379 cargoes. Cargo volumes decreased to 341 in 2005, and Badak LNG could no longer meet all earlier contractual commitments. Government policy also redirected some gas supplies toward domestic fertilizer production, reducing the volume available for export liquefaction. LPG production was suspended from 2006, although it restarted in 2009, when reported LPG output reached 435,518 tonnes. LNG production in 2009 was reported at 17,375,053 tonnes. By 2011, the facility was reported to be operating four trains, illustrating the effect of resource depletion and changing domestic priorities on the original export model. Beyond production, Badak LNG became a source of Indonesian LNG expertise. In 2011, the company worked with Jakarta State Polytechnic to establish the LNG Academy. Existing training facilities were adapted for academic and professional instruction. Additional cooperation with Indonesian universities covered natural-gas education, enterprise-resource-planning systems, refinery digitalization, mechanical engineering, business management, and vocational development. Badak LNG later created a Corporate Strategic Planning and Business Development function to commercialize and share its operational knowledge. Its activities included training, operator assistance, refinery startup support, and technical advice for domestic and international clients. The projects and organizations named in available references include Pertamina Gas, Pertamina Gas Niaga, Tangguh LNG, Donggi-Senoro LNG, Angola LNG, Cameroon LNG, Mozambique LNG, Yemen LNG, Mitsui Chemicals, Chiyoda, and Dominion Cove Point LNG. The company's labor structure includes three identified unions—SP-FPLB, SP-LNG, and SP-BLB—as well as employees who do not belong to those unions. SP-FPLB is described as the dominant union and the recognized participant in collective labor-agreement preparation. The available reference material does not identify current executives, financial results, or a separate public stock listing.

• 2018

  SP-BLB labor union is formed

  [1]Badak LNGen.wikipedia.org

  A third identified labor union, SP-BLB, is established at PT Badak NGL.

• 2011

  LNG Academy is established

  [1]Badak LNGen.wikipedia.org

  Badak LNG and Jakarta State Polytechnic launch a specialized LNG education and training program.

• 2009

  LPG production resumes

  [1]Badak LNGen.wikipedia.org

  The LPG facilities return to operation, with reported output of 435,518 tonnes during the year.

• 2006

  LPG production is suspended

  [1]Badak LNGen.wikipedia.org

  LPG output is temporarily halted because less gas is available for processing.

• 2001

  Production decline begins

  [1]Badak LNGen.wikipedia.org

  Bontang LNG cargo volumes begin a sustained decline as feed-gas availability falls.

• 1977

  First train and first cargo

  [1]Badak LNGen.wikipedia.org

  Train A is completed, the plant is inaugurated, and the first LNG shipment is sent to Japan.

• 1974

  PT Badak NGL is incorporated

  [1]Badak LNGen.wikipedia.org

  Pertamina, VICO Indonesia, and JILCO establish the company that will operate the Bontang LNG project.

• 1973

  Japanese LNG sales agreement

  [1]Badak LNGen.wikipedia.org

  An LNG sales contract is agreed with Chubu Electric, Kansai Electric Power, Kyushu Electric Power, Nippon Steel, and Osaka Gas.

• 1972

  Muara Badak complex gas discovery

  [1]Badak LNGen.wikipedia.org

  Huffco discovers a major gas accumulation in the Samberah, Nilam, and Mutiara fields near Muara Badak.

• 1971

  Badak gas field begins production

  [1]Badak LNGen.wikipedia.org

  Production of natural gas and condensates begins from the Badak field.

• 1970

  Badak gas field is discovered

  [1]Badak LNGen.wikipedia.org

  The Badak gas field is reported as having been discovered in the South China Sea; subsequent development was undertaken by Pertamina.

An Indonesian industrial LNG operator and technical-expertise center, historically focused on large-scale LNG export from East Kalimantan and increasingly associated with training and support for LNG projects.

• LNG · 1977

  Liquefied natural gas

  Badak LNG's principal product is liquefied natural gas produced by treating and cooling pipeline gas at the Bontang complex. LNG was initially produced for export under contracts with Japanese buyers and became the company's defining industrial output. The expanded complex comprises eight process trains, although later feed-gas constraints reduced the number of trains operating at some points.

• LPG

  Liquefied petroleum gas

  The Bontang facilities also include LPG production capability associated with the natural-gas processing operation. LPG production was suspended from 2006 because of reduced feed-gas availability and resumed in 2009. The available reference reports 435,518 tonnes of LPG production for 2009.

• Industrial services

  LNG technical services

  Through its business-development and technical functions, Badak LNG shares operating expertise through training, assistance to field operators, refinery startup support, commissioning advice, and technical assistance. These activities extend the organization's role beyond commodity production into LNG project support and knowledge transfer.

• Education and training · 2011

  LNG Academy

  The LNG Academy is a specialist education and training program created with Jakarta State Polytechnic. It uses facilities associated with Badak LNG's former employee-training activities and is intended to develop technical capabilities for Indonesia's LNG industry.

• 2011LNG Academy

  Indonesia

  Badak LNG collaborated with Jakarta State Polytechnic to establish an academic and technical-development program focused on LNG operations and the creation of skilled industry personnel.

  Outcome. The initiative converted and expanded existing company training resources into facilities supporting higher education and professional LNG instruction.

  Source

• 2011

  Expand from LNG production into technical knowledge servicesStrategy

  Background

  Badak LNG had accumulated substantial operating experience while Indonesia and other countries were developing additional LNG facilities.

  Action taken

  The company formed a Corporate Strategic Planning and Business Development function to provide training, startup support, operator assistance, and technical advice to LNG-related clients.

  Aftermath

  The organization reported domestic and international technical-support engagements, including work connected with LNG projects in Indonesia, Africa, Yemen, Japan, and the United States.

  Source

• 2006

  Suspend LPG production during feed-gas constraintsStrategy

  Background

  Declining gas availability reduced the volume of feedstock available to the Bontang operation.

  Action taken

  Badak LNG temporarily stopped LPG production while prioritizing available gas within the constrained operating system.

  Aftermath

  LPG production resumed in 2009, but the broader LNG operation continued to experience declining output and reduced train utilization.

  Source

1. 1Badak LNGen.wikipedia.org
2. 2The Report: Indonesia 2010books.google.com