PLN to pay Exspan for gas

PLN to pay Exspan for gas

JAKARTA (JP): State electricity company PLN said on Wednesday it would soon pay its US$$11 million debt to PT Exspan Kalimantan, a subsidiary of publicly listed oil and gas company PT Medco Energy Corporation.

PLN president Adhi Satriya said the company had allocated the money to pay the debt and "was ready and willing to immediately make the payment".

Exspan earlier accused PLN of refusing to pay $11 million in arrears for the natural gas it had supplied over the past 14 months to the state company's power plant in Tanjung Batu, Kutai regency, East Kalimantan. Exspan supplies the gas from its Sanga- Sanga gas field in the province.

Exspan said it would cut the gas supply to the 60-megawatt power plant if PLN did not begin repaying the debt within two months.

The threat caused anxiety among residents of East Kalimantan, who feared a blackout because the power plant is the main source of power in the province.

PLN earlier said it would not pay for the natural gas unless Medco cut the price of the gas.

Exspan agreed on Aug. 30 to temporarily cut the price of its natural gas to Rp 15,300 (about $2) per million British thermal unit (MMBTU) from $3 per MMBTU, but Adhi said state-owned oil and gas company Pertamina had yet to approve the agreement.

PLN will make the payment once Pertamina approves the deal, Adhi said. (jsk)