Andalas says regulatory changes bode well for wellhead gas to power projects in RI
Thursday, May 4 2017 - 02:47 AM WIB
Andalas Energy and Power Plc, the AIM traded Indonesian focused energy company, said that the latest regulations and decrees issued by the Indonesian government bode well for its plans to develop wellhead gas-fired power plants up to 500 MW of installed capacity in the country.
Andalas said in a statement Wednesday that the regulatory changes highlights the Indonesian government?s move to prioritize the development wellhead gas to power projects to help resolve the country?s power shortage problem.
The company said that among of the new regulations and decrees introduced recently are as follows.
? Minister of Energy and Mineral Resources Ignasius Jonan issued on February 2 a new regulation, which essentially gives priority to wellhead gas to power projects.
? The Minister has issued Decree No. 1415K/20/MEM/2017 which approves the 2017-2026 electricity procurement business plan (RUPTL) of state-owned electricity firm PT PLN.
? The Minister decrees that PLN will give priority to wellhead natural gas plants where energy sources are available in business areas identified in the plan and that he may vary the plan throughout the year.
? The regulations outline a fast-track approvals process via direct appointment of wellhead IPP projects without the need for a public tender.
? Andalas has commenced the next steps in advancing its projects through this process.
Andalas CEO, David Whitby said, ?Andalas is pioneering the concept of rolling out wellhead IPPs using established technologies to help tackle Indonesia?s energy crisis at the local level. In our view, the recent regulatory changes demonstrate that the Government recognizes that these projects can make a significant contribution towards achieving its 35,000MW target of new capacity and delivering affordable power to the people of Indonesia. Being a first mover has the potential to generate significant rewards for our shareholders as we look to rapidly build an initial portfolio targeting 500MW of installed capacity.
?The new regulations and Decree are the first time wellhead IPPs (independent power producers) have been recognized as a distinct class of project and given special consideration outside the usual planning and approval cycle. The Decree prioritizing wellhead IPPs opens the door for Andalas and our partner Pertamina to identify and propose further projects for approval by the Minister, capitalizing on the progress made on our recently announced project pipeline.?
As has been previously reported, Andalas is teaming up with Indonesia?s state-owned oil and gas firm PT Pertamina to develop its first wellhead gas to power project in Jambi Province with capacity of 60 MW. Under the plan, the project will take advantage of gas supply from Pertamina?s Tuba Obi East oil and gas concession in the province.
According to a feasibility study completed by Andalas, construction of the project would commence by the fourth quarter of 2017 with a planned completion by end of 2018.
Andalas and Pertamina are also looking to develop more projects to generate total capacity of 250-500 MW, and have identified two additional gas fields suitable for development of wellhead power plants projects fired by gas.
Editing by Reiner Simanjuntak