Medco and PLN explore cooperation in gas supply

Oil and gas producer PT Medco and state owned electricity company PLN will cooperate in the development of several gas fields and in the construction of power plants that will absorb the gas supply from the oil and gas company, Bisnis Indonesia reported on Thursday.

The memorandum of understanding (MOU) on the cooperation plan will be signed in Jakarta on Thursday (today).

PLN?s director for operation Bambang Harmiyanto Priyadi said in Jakarta on Wednesday that the MOU would contain an initial agreement to explore the possibility of Medco to provide a significant gas supply to PLN?s power plants.

"PLN will first study the ability of Medco?s gas fields to meet the gas needs of PLN," he said, adding that the study would be carried out in Medco?s several gas fields in South Sumatra, East Kalimantan and Riau.

This year?s gas supply to PLN has declined to 169,000 BBTU, while the demand for gas from the existing power plants particularly those located in West Java and East Java continue to increase. (*)