It?s Pertagas not PLN which is unable to absorb Kangean gas

By Bernard Loebs

State owned electricity PT Perusahaan Listrik Negara (PLN) dismissed allegation that it was unable to absorb gas from Kangean Energy Limited (KEI), saying the rumor was spread by irresponsible traders.

Suryadi Mardjoeki, PLN?s Head of Gas Division, said that PLN takes gas supply from KEI to the amount set in the contract. Under the contract, PLN is supplied with 160 bbtud of gas from the Kangean field offshore Madura Island, East Java operated by KEI.

Suryadi insisted PLN buys the gas directly from KEI rather than through traders.

It is PT Pertagas rather than PLN, which is unable to absorb the gas from Kangean to the amount set in the contract, Suryadi said.

Suryadi explained that under contract, Pertagas buys 100 bbtud of gas from Kangean. The contract has a take or pay clause which obligates the firm to take the whole volume set in the contract. Pertagas then distributes the volume to five traders with each receiving 20 bbtud and the traders seem to be unable to absorb the gas.

Pertagas?s Corporate Secretary Eko Agus Sardjono confirmed that it is only able to absorb 70 percent of its contracted volume.

?We are now building a distribution gas pipeline in Grati and Wunut Ngoro so that all the contracted volume can be absorbed.,? he said, while acknowledging despite its inability to absorb the gas, it has to pay for the gas to the amount set in the contract.

Editing by Johannes Simbolon