Govt mulls converting E. Kalimantan power plants to make room for more LNG export

Government is mulling to replace gas-fired power plants in East Kalimantan state-owned fertilizer plants and Bontang LNG plant with coal-fired ones to make more gas available for LNG export, Minister of State enterprise Sugiharto said on Thursday as quoted by media.

Replacement of gas-fired power plants in fertilizer plants alone, which amounted to 309 MW, could save US$85 million per annum, he said after coordination meeting to evaluate possibility of conversion at the office of the Vice President. He did not give explanation how he arrived with the figure, but said investment to convert to coal-fired power plants would range between $400-600 million and would be break even in 4-5 years.

Elsewhere, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that replacement of gas-fired to coal-fired power plants in Bontang, the world?s largest LNG plant, could save 220 MMCFD of gas, or equal to 22 cargoes of LNG per year. He said conversion to coal-fired power plant at Bontang would require investment of $600 million and the project could be realized as early as 2009.

Bontang LNG plant is currently operating 16 x 12.5 MW power plants.

Bontang is suffering from acute gas supply shortage, forcing it reduce LNG shipments to Japan, South Korea and Taiwan.

East Kalimantan province is home of the country?s largest coal miners such as Katim Prima Coal, Kideco Jaya (*)