PLN moves to use more natural gas
PLN moves to use more natural gas
Leony Aurora The Jakarta Post/Jakarta
State power firm PLN is ready to sign soon gas sales agreements (GSA) worth millions of U.S. dollars with two producers to supply three power plants in Kalimantan and East Java starting next year, a company official says.
PLN will buy gas of between 120 million standard cubic feet per day (mmscfd) and 150 mmscfd from EMP Kangean Ltd., a subsidiary of the country's second-largest private oil and gas company PT Energi Mega Persada, PLN's deputy of primary energy Tonny Agus Mulyantono said recently.
"The gas will be used to increase the existing supply at the Gresik plant and for the Grati plant starting 2007," said Tonny.
Both power plants are located in East Java.
The price agreed upon for the 15-year contract is US$3 per million British thermal unit (mmBtu), said Tonny.
"We will sign the GSA after Lebaran," he added, referring to the Muslim holiday that will fall on Nov. 3 and Nov. 4 this year.
The Gresik plant, which can use gas, high-speed diesel and marine fuel oil, to generate power has a total installed capacity of 2,260 megawatts (MW). The plant currently gets gas from Kideco and EMP Kangean, but needs higher supply to convert more units into using the cheaper fuel.
The Grati combined-cycle plant has a capacity of 750 MW and at present burns oil-based fuel due to the unavailability of gas.
Next week, the state firm will sign another GSA with PT Semco, a gas producer in East Kalimantan that operates fields under a Technical Assistance Contract (TAC) with state oil and gas firm PT Pertamina.
Semco will supply between 15 mmscfd and 20 mmscfd of natural gas starting January next year for PLN's plant in Tanjung Batu in the province, Tonny said.
The price applied for the plant, which has a total capacity of 180 MW comprising three units, will be between $2.8 per mmBtu and $3 per mmBtu.
Soaring oil prices and the burden of the fuel subsidy on the state budget have prompted the government to apply market prices to industries and for power-generation purposes.
From October, PLN will have to pay more than double the prices it used to for the oil-based fuel that it burns to generate power.
PLN's director of primary power generation Ali Herman Ibrahim said on Oct. 2 that due to the new policy, as well as more expensive coal, the company's fuel costs in 2006 would jump by 50 percent to Rp 45 trillion (US$4.45 billion) from Rp 30 trillion to be spent throughout this year.