PLN to start bids for LNG terminal in West Java<\/p>\n
Fitri Wulandari, The Jakarta, Jakarta<\/p>\n
State-owned electricity company PT Perusahaan Listrik Negara
\n(PLN) will begin a tender process within the next two months for
\nthe construction of a natural gas receiving terminal in West
\nJava.<\/p>\n
PLN president Eddie Widiono said that the facility, the first
\nin the country, would make less expensive fuel available for its
\npower plants.<\/p>\n
\"We will open the bidding within one or two months,\" Eddie
\ntold reporters on Thursday.<\/p>\n
PLN hopes the construction can be started next year, and
\ncompleted sometime between 2006 and 2007.<\/p>\n
The construction of a liquefied natural gas (LNG) receiving
\nterminal would allow PLN to reduce the use of more expensive fuel
\noil in the operation of its power plants on Java.<\/p>\n
Lack of natural gas has forced PLN to switch to oil to run
\nmany of its combined-cycle power plants. The use of fuel oil has
\nreduced the life span and performance of PLN's power plants,
\nwhich has, in turn, hastened Java's impending power shortage.<\/p>\n
Eddie added the project would also allow PLN to slash costs
\nfor fuel to produce electricity, particularly for costly crude
\noil.<\/p>\n
PLN has said it will require Rp 29 trillion this year to buy
\ncrude oil, coal and natural gas to just to run the power plants.
\nCrude oil makes up the bulk of that at Rp 14 trillion.<\/p>\n
Eddie said by using natural gas, the company could save
\nbetween Rp 10 trillion and Rp 15 trillion annually.<\/p>\n
However, he stopped short of saying the company would decrease
\nelectric bills for the average household.<\/p>\n
The terminal will receive LNG, which is natural gas turned
\ninto liquid after a freezing process. In the terminal, the LNG
\nwill be converted back into a gaseous form before being
\ndistributed through pipelines to the power plants or other
\nconsumers.<\/p>\n
The terminal, which will have a capacity to supply up to 800
\nmillion cubic feet per day (MMSCFD) of natural gas, is planned to
\nbe located in Cilegon, West Java.<\/p>\n
Eddie had earlier said that the construction of the terminal
\nwould cost between US$250 million - $300 million.<\/p>\n
Asked if he was confident they could secure the financing,
\nEddie only said it would seek financing from banks and investment
\ncompanies.<\/p>\n
He added that the project would be open to all investors.<\/p>\n
\"We are open to investors but we will see what they have to
\noffer,\" Eddie remarked.<\/p>\n
In addition to its own plants, other natural gas consumers in
\nJava will also benefit.<\/p>\n
The Oil and Gas Upstream Regulatory Body (BP Migas) said that
\ndemand for natural gas in West Java would jump from 751 MMSCFD in
\n2003 to 1,000 MMSCFD by 2006, boosted mostly by demand from
\nstate-owned gas distribution firm PT Perusahaan Gas Negara (PGN),
\nPLN's Muara Karang power plant and the Pupuk Kujang fertilizer
\ncompany.<\/p>\n
The supply of natural gas is expected to come from domestic
\nsources in Sumatra via a transmission pipeline.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pln-to-start-bids-for-lng-terminal-in-west-java-1447893297",
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