Gas reallocation to cost PLN $27m<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
State power firm PT Perusahaan Listrik Negara (PLN) will see
\noperating costs rising by more than US$27 million per year
\nfollowing plans to set some of its natural gas supply aside for
\nvarious manufacturing plants in East Java, an official says.<\/p>\n
The cost difference between using 10 million standard cubic
\nfeet per day of natural gas as compared to the diesel fuel
\nequivalent was roughly $30,000 a day, PLN's deputy of primary
\nenergy Tonny Agus Mulyantono claimed on Thursday.<\/p>\n
\"The calculation is based on the price of subsidized diesel
\nfuel at Rp 2,200 (about 23 U.S. cents) per liter,\" said Tonny.
\nAnd with PLN having to pay, according to the market prices, which
\nfor August is set at Rp 5,480 per liter, the cost disparity will
\nmore than double to over $27 million a year.<\/p>\n
State gas distributor PT Perusahaan Gas Negara (PGN) has asked
\nPLN to reallocate 10 mmscfd of its gas supply for East Java's
\nindustrial plants and use diesel fuel instead to generate power.<\/p>\n
PGN has been forced to lower supply to industrial
\nmanufacturers as the output from natural gas fields owned and
\noperated by Lapindo Brantas and EMP Kangean continue to decline.<\/p>\n
State oil and gas firm PT Pertamina said that PLN would have
\nto pay market prices for the additional diesel to generate its
\npower.<\/p>\n
\"We will need to procure 100,000 kiloliters of diesel fuel a
\nyear if the gas reallocation takes place,\" said Pertamina's fuel
\nsales and distribution head Achmad Faisal.<\/p>\n
\"It's what PLN, PGN, (the Oil and Gas Upstream Regulatory
\nAgency) BP Migas and Pertamina agreed upon in a meeting yesterday
\n(Wednesday),\" said Faisal, adding that the government would be
\nasked to cover the disparity between PGN's compensation for the
\ngas and PLN's actual cost difference.<\/p>\n
Although the gas reallocation is slated to start on Aug. 15,
\nPGN is yet to establish the formula to calculate the
\ncompensation.<\/p>\n
\"We have not drafted a formula. There's no certainty as yet
\nwhether the (gas reallocation) plan will materialize,\" said PGN's
\nfinance director Djoko Pramono.<\/p>\n
PLN has shown a lot of reluctance to change from natural gas
\nto the more expensive diesel, which, without sufficient
\ncompensation, will make it even more difficult to return the
\ncompany to the black.<\/p>\n
PLN booked another year of net losses in 2004 at Rp 2.02
\ntrillion.<\/p>\n
PGN started applying a quota-system on larger industrial
\nmanufacturers in East Java in July, reviewing the allocation
\nmonthly, as supply from gas fields decline to only 73 mmscfd from
\nthe expected 120 mmscfd. PGN will stop its gas flow if a company
\nexceeds its respective quota.<\/p>\n
Industry players, particularly ceramic manufacturers, feared
\nthat the new quota would further hamper the ailing industry.
\nSpending for gas accounted for almost a third of ceramics'
\nmanufacturers total costs.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/gas-reallocation-to-cost-pln-27m-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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