Jakarta (IOGnews) - State oil and gas company PT Pertamina and state gas distributor PT PGN agreed on Thursday to form a joint venture to operate a floating LNG receiving terminal in the waters off West Java.

Pertamina president director Karen Agustiawan and PGN president director Hendi Prio Santoso inked the deal at the office of the State-Owned Enterprises Ministry. State-Owned Enterprises Minister Mustafa Abubakar and Energy Minister Darwin Saleh witnessed the signing.

The construction of the terminal will start later this year. When fully operational in 2011, the terminal will store between 1 million and 1.5 million tons of LNG.

Pertamina will hold 60 percent of the shares in the joint venture, with PGN holding the rest. The share ownership will be represented in the company’s structure, which will see Pertamina taking the president director, technical director, operational director, president commissioner and commissioner posts. PGN will be given the finance director, administration director and commissioner posts.

"The project will complement Pertamina’s LNG chain which has been in place for more than 30 years,” Agustiawan said as quoted by Antara state news agency.

The joint venture will receive gas supplies from East Kalimantan of 11.75 million tons over 11 years.(JP)