"We are drafting an environmental impact analysis on the project. Shortly after a feasibility study on the project has been completed, we will start the building of the project," the company's president director, Eddie Widiono said here over the weekend.

The project is important for PLN to reduce the risk of facing a shortage of LNG or coal supplies from the company's main suppliers, he said.

Citing an example, he said the supply of coal to PLN's coal-fired power plants was disrupted recently because PT Bukit Asam as PLN's main supplier tends to export its coal for higher prices.

"Coal demands from a number of Asian countries, China in particular, had been on the rise, so that much of the Indonesian coal is exported to that country," he said.

According to the result of technical and economic studies, a delay in the supply of LNG and coal to PLN's power plants will cause the company to suffer losses about the same as the investment needed to build the LNG terminal, he said.