Andalas, Pertamina, Siemes plan Sumatra power project
Thursday, October 19 2017 - 01:33 AM WIB
British energy firm Andalas Energy and Power plc announced Wednesday that it has signed a memorandum of understanding with PT Pertamina Power Indonesia (PPI), a wholly-owned subsidiary of Indonesia?s state-owned oil and gas firm PT Pertamina, and Siemens AG regarding the development of an independent power producer at the Puspa gas field in Sumatra.
Andalas said in a statement that the Puspa field is operated by Pertamina subsidiary PT Pertamina EP (PEP).
The company said that the MoU establishes the basis to engage project partners; negotiate and agree further project agreements with all stakeholders; secure gas from the Puspa field; and generate conceptual development plans including an electricity demand analysis, a load flow study, a site identification study, identify and select gas fired power generation technology, and identify and select an engineering, procurement and construction contractor.
?The parties have agreed to bear their own costs and to share all agreed third party costs, equally during this phase of the project,? Andalas said.
The agreement includes binding provisions relating to the joint pursuit of the project, conditions precedent, exclusivity, costs, term and confidentiality and non-binding provisions relating to the objectives and execution of further agreements and joint committees. It is for a term of 24 months and subject to all necessary approvals and finance.
The company said it will make a final investment decision (FID) after the project has been included in the electricity procurement business plan (RUPTL) of Indonesia?s state-owned power firm PT PLN, and the company has completed the work program outlined above, obtained various licenses relating to the facility and transmission lines and negotiated the final agreements with other stakeholders including the consortium members, PEP, PLN and lending institutions.
The third party costs to Andalas during the development phase are expected to be modest. The material costs of the project relate to the capital costs of the power plant, which will only be incurred when the project achieves FID.
David Whitby, CEO of Andalas Energy & Power, commented, ?The execution of the Puspa MOU establishes our first joint project with PPI and Siemens.
?Pertamina has recently completed an appraisal program on the Puspa field. The proposed IPP would enable Pertamina to commercialize the field. Andalas? preliminary assessment is that it will support a 20 to 50MW wellhead IPP. We will continue to refine this model in discussions with all stakeholders including PPI, Siemens, PEP and PLN.?
Editing by Reiner Simanjuntak