45 firms to join PLN's tender for fuel supply

As many as 45 oil and gas companies, several of which are foreign companies like Shell, British Petroleum (BP) Plc. and Petronas, have expressed their interest in joining a tender for the supply of one million kiloliters of High Diesel Speed (HSD) to state electricity company (PLN), Bisnis Indonesia reported Tuesday.

Tender winners are expected to be announced in April, 2007.

PT PLN?s deputy director for primary energy Tony Agus Mulyantono said in Jakarta Monday that state oil and gas company Pertamina has also sent a letter expressing its interest in taking part in the tender. ?Pertamina will join the tender held under direct offer scheme,? he said.

Tony asserted that only companies that offer cheapest price would win the tender for the supply of one million kiloliters of HSD as the tender was aimed to get the cheapest price (of HSD).

He said that winners could be more than one company as there were several power plants that PLN had to meet their HSD needs and therefore, the exact volume of HSD that each power plant needs had to be first counted.

According to Tony, the prices will vary, depending on where each of the power plants is located because the prices involves transportation cost. ?The purchasing prices that we consider are those that have included transportation cost to the location of the power plant,? he said.

Sources told the daily that companies that hold a permit for upstream fuel business issued by the Ministry of Energy and Mineral Resources have greater opportunities to win the tender. They include Shell, Petronas, PT Sigma Rancang Perdana (Gulf Oil) and PT Aneka Kimia Raya (AKR).

Meanwhile, Pertamina?s head of fuel division Djaelani Sutomo denied that the company would join the tender, saying that the company would only offer new prices.

Currently, he said, Pertamina and PLN are entering into a contract on the supply of 9 million kiloliter of fuel to PLN for 2007. ?Under the contract, PLN will have to pay the fine if it fails to pay on schedule and on the other hands, Pertamina will also have to pay the fine if it fails to supply the fuel on schedule,? he said. (*)