New power plant for Riau oil fields

JAKARTA (JP): PT Mandau Cipta Tenaga Nusantara is building a US$190 million cogeneration plant in the Riau province to support the oil operation of its sister company, PT Caltex Pacific Indonesia.

Caltex said in a statement on Monday that the 300 megawatt plant, the country's largest, will supply power and steam to support oil extraction at Caltex's steamflood operation in Duri, the world's largest such operation.

"The cogeneration plant is expected to be completed in November 2000," the company said.

It said the project is a result of the cooperation between Pertamina, Caltex, Mandau Cipta and the government, and is a show of confidence in the future of Indonesia, despite the current economic crisis and slumping oil prices.

Mandau Cipta is a consortium comprising the United States energy companies Chevron and Texaco -- which are the co-owners of Caltex -- and a local company PT Nusagalih Nusantara, which has a 5 percent holding.

Cogeneration is the term for the process that makes use of the heat energy resulting from the burning of natural gas to make electricity.

A common gas-fired power plant can only turn 30 percent of the energy in gas into electrical power, and the rest is wasted in heat and and steam.

Cogeneration power plants can produce the same amount of electricity and then use the steam's thermal energy for heating and cooling needs.

The steam produced at the Duri cogeneration plant will be pumped into the Duri oil wells to extract the crude oil.

Currently, Caltex burns a large amount of crude oil to produce steam to be pumped into the wells.

The company said the cogeneration plant will be fed with natural gas piped from the Corridor block owned by Canada's Gulf Resources in Grissik, Musi Banguasin, South Sumatra.

Gulf will receive crude oil from Caltex in return for the gas.

"By using cogeneration rather than the traditional method of producing electricity and steam separately, Pertamina/Caltex will save approximately 13,000 barrels per day of crude oil," Caltex's senior vice president and deputy managing director Humayunbosha said, adding the cogeneration plant will also reduce Caltex's oil production costs.

The cogeneration plant will be operated by Amoseas Indonesia, one of Caltex's sister companies, which will supply power to Caltex at rates well below those charged by most private power companies throughout Java and Sumatra.

The contract for the construction of the cogeneration power plant has been awarded to a consortium comprising PT Stone and Webster Indonesia and Westinghouse International Power Systems. The consortium will rely on local contractors to build the plant. (jsk)