Four power plants to start using LPG

Leony Aurora, The Jakarta Post/Jakarta

In line with the government's instruction to reduce dependency on fuel, state power firm PLN has announced that four power plants will be converted to use liquefied petroleum gas (LPG), requiring 850,000 tons of the gas a year.

According to PLN data, the power plants in the first phase of the project -- Tambak Lorok, Sunyaragi, Siantan, and Sei Kledang -- will need 2,350 tons of LPG per day to generate 361 megawatts (MW) of electricity.

"We hope to start using LPG this year," said PLN deputy head of primary energy Tonny Agus Mulyantono on Friday.

"We first need to talk with LPG suppliers about the facilities they may need and BP Migas about the supply," he added, referring to the Oil and Gas Upstream Regulatory Body.

In the second phase of the project, to be conducted next year, PLN plans eight more power plants with a total capacity of 931.4 MW to use LPG, with an additional demand of 6,054 tons a day or 2.2 million tons a year.

BP Migas deputy finance and marketing Edi Purwanto said it was still waiting for specific data from PLN on LPG requirements and schedule.

"The LPG will most likely come from Bontang," said Purwanto. Bontang is a gas-rich area in East Kalimantan, which produces LPG as well as liquefied natural gas.

Purwanto said that Indonesia still had several long-term LPG contracts with customers, mainly from Japan.

"There are several customers whose contracts will expire at the end of this year," he said, declining to specify the volume involved except for it being "quite a lot".

Indonesia produces between 3.5 million tons and four million tons of LPG per year, of which less than half is sold on the domestic market.

"We will support PLN's plan to use LPG," said Purwanto.

BP Migas will also request that the state power firm buy LPG at the market price, instead of the lower domestic price, he added.

As global oil prices soar and PLN's fuel needs rise higher than the government quota, the company is looking for cheaper alternatives to generate power.

PLN estimates show that the utilization of LPG, assuming global prices of US$380 per ton for LPG and Rp 4,800 (about 45 U.S. cents) for diesel fuel, could save the company Rp 2,010 (about 20 U.S. cents) per liter of fuel.

This will also ease the subsidy burden for the government, as diesel fuel is sold to PLN at Rp 2,200 per liter.

The company has said that it would only use LPG for three years while it waited for gas supply to flow to several plants.

Combined-cycle power plants like Tambak Lorok, Sunyaragi and Siantan can operate on natural gas, but are forced to use fuel as a ready gas supply is not available yet.

"They are ready to use LPG at anytime and do not need any modification," said Tonny.

The fuel-fired Sei Kledang plant in Samarinda will need to be modified, which may take eight months due to PLN's inexperience with conversion and tender procedures.

Tony said that PLN may continue to use LPG to replace fuel in such plants after modification. "LPG is transportable, just like fuel," he said.

Power plants to use LPG in first phase ---------------------------------------------------------------- No. Power plant Location Capacity LPG demand

(MW) (tons/day) ---------------------------------------------------------------- 1. Tambak Lorok Semarang 218 1,417 2. Sunyaragi Cirebon, West Java 60 390 3. Siantan Pontianak 34 221 4. Sei Kledang Samarinda 49.6 322.4 ---------------------------------------------------------------- Total 361.6 2,350.4 ----------------------------------------------------------------