Medco to sell gas to PLN

Medco to sell gas to PLN

JAKARTA: PT Medco Energi Internasional, Indonesia's biggest publicly traded oil company, on Friday signed an agreement to sell natural gas from its field in South Sumatra to state-owned utility PT Perusahaan Listrik Negara (PLN).

The company will start supplying 87.4 trillion British thermal units of natural gas from the field in South Sumatra province at an average price of US$2.97 per million British thermal units, Kardaya Warnika, chairman of the upstream oil and gas regulatory body (BP Migas), said in a text message from Surabaya, where the agreement was signed.

The gas supplied by Jakarta-based Medco will fuel PLN's power plant in South Sumatra, Kardaya said. The state utility said last month it needs to invest $16 billion on new generation capacity over the next 10 years to help avoid shortages.

Demand for electricity in Indonesia is expected to outstrip supply this year. The country needs at least 47 new power plants and 14 high-voltage transmission lines to meet demand in the next 10 years, according to forecasts by PLN. -- Bloomberg