Medco to supply more gas to PLN

The Jakarta Post, Jakarta

Publicly listed energy company PT Medco Energi International is seeking to increase its gas supply to state-owned electricity company PLN as a source of energy both for existing power plants and future ones.

The two companies on Thursday signed a memorandum of understanding (MoU) for this purpose. The MoU was signed by Medco president Hilmy Panigoro and PLN president Eddie Widiono.

PLN's need for gas will continue to increase in the future as the company will develop new power plants.

Additional power demand until 2005 in Java alone is projected to be between 11,000 Mega Watt (MW) to 12,000 MW, and around 5,000 MW to 6,000 MW outside Java.

Currently, Medco supplies 30 million cubic feet per day of gas to PLN for power plants in Tanjung Batu, East Kalimantan, and in Hidralaya, in South Sumatra.

But the company has quite abundant gas reserves, the equivalent of between 900 million to 1 billion barrels of oil.

Medco is also planning to set up a receiving liquefied natural gas (LNG) terminal in Java to anticipate the development of the Muara Tawar, Tanjung Priok, and Muara Karang power plants.

The gas will come from Medco's gas field in Luwuk, South Sulawesi.

Meanwhile, PLN vice president Eden Napitupulu was quoted by Kompas as saying that the state electricity company would provide greater opportunities for Medco as a national company to supply gas to PLN, but it would not completely shut its doors to better offers made by other gas companies.