PLN plans to use less oil in power plants by 2006

PLN plans to use less oil in power plants by 2006

The Jakarta Post, Jakarta

State-owned power firm PT PLN says it plans to reduce the use
of oil-based fuel in its power plants to less than 5 percent by
2006, the date when a series of natural gas transmission projects
and coal-fired power plants are due to come online.

Ali Herman Ibrahim, PLN's director of power plants and
primary energy, said that by using more natural gas, the company
could cut down the budget needed to buy oil-based fuel by between
20 and 30 percent by 2006.

"The current budget for oil-fuel based is still high. In 2006,
Tanjung Jati B will be completed and natural gas and coal will
become the dominant energy supply for power plants," Ali said on
Monday.

He was referring to the 1,300 Megawatt coal-fired Tanjung Jati
B power plant in Semarang, Central Java that is under
construction and due to be completed in 2006.

In the same year, state-owned natural gas distribution and
transmission company PT PGN would complete the 1,650 kilometer
natural gas transmission pipelines from Grissik to Pagardewa in
South Sumatra to PLN's Muara Tawar and Muara Karang power plants
in West Java.

The pipelines are expected to transport some 600 million cubic
feet of gas a day when they begin, increasing transmission up to
900 million cubic feet a day by 2009.

Ali Herman said spending on oil, coal and natural gas to fire
PLN's power plants was projected to increase by 7 percent this
year.

The company would spend Rp 3.4 trillion on natural gas and
coal, and Rp 14 trillion on oil. Last year, PLN spent Rp 12
trillion to buy oil.

Critics of the company have said it should be able to provide
cheaper electricity if it uses more gas than oil.

PLN spends Rp 510 (about US6c) producing one kilowatt-hour of
electricity using oil, while the cost is only Rp 200 if it uses
natural gas.