Tue, 12 Aug 2003

KEPCO to build power plant in RI

The Jakarta Post, Jakarta

South Korean power company Korean Electric Power Corporation (KEPCO) is interested in building a power plant in West Java, given the high power demand from businesses in the province.

President of state electricity company PLN Eddie Widiono said KEPCO was likely to build a 2 x 500-megawatt (MW) power plant in the province.

"It's not definite yet ... but the size is around 2 x 500 MW because we need a high-capacity power plant," Eddie said on Monday following a ceremony held to inaugurate a PLN service center at Mampang, South Jakarta.

"The company has held talks with PLN but we don't know yet how great the investment will be," he said, adding that the planned power plant was expected to be in operation by 2007.

Eddie did not provide details about the financing scheme to build the plant but said funds would include loans from Japan.

Previously, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said KEPCO wished to invest in the power sector as well as buy one million tons of liquefied natural gas (LNG) from Indonesia.

"Apart from investment in the power sector, we have also made an offer to the company to buy LNG from Indonesia," Purnomo said recently.

In return, the minister said KEPCO would ask PLN to buy its power.

Purnomo asserted the government would make sure that the power price bought from KEPCO would not exceed that of LNG purchase by KEPCO from Indonesia to avoid "loses."

The government has actively been approaching South Korean companies, which are among Indonesia's traditional LNG buyers, to extend or secure a new LNG contract.

Some of the LNG contracts with South Korean buyers are due to expire in 2007.

Recently, Indonesia's third LNG plant, Tangguh, won a tender to supply LNG to South Korea's power firm SK Corp. and steel producer POSCO.

Tangguh, which is located in Papua province, will supply both companies with an average of 1.1 to 1.5 million tons of LNG per annum for 20 years.