Minister: Only PLN, IPPs allowed to import LNG

Petromindo|Thomas

Minister of Energy and Mineral Resources Ignasius Jonan said on Thursday he has signed a new regulation on the import of LNG for power plants.

He said that the LNG import can only be made by state-owned electricity firm PT PLN and independent power producers (IPPs) without the role of traders and that the LNG must be used to meet own demand.

He added that the LNG can only be imported if the price is lower than the price of LNG or gas produced at home, pointing out that import can only be made if the price of LNG or pipeline gas at home exceeds 11.5 percent Indonesia Crude Price.

Jonan said that the new policy of allowing import of LNG for power plants is made to help bring down gas price at home and trigger competition in the domestic gas industry. He, however, stressed that the government will continue to prioritize the use of domestic gas despite the new import policy.

According to the ministry, gas-fired power plants currently account for about 20 percent of installed power capacity, while coal is still dominating accounting for more than 50 percent.

According to the 2016-2025 electricity procurement business plant of PLN (or RUPTL), new power plants capacity to be developed during the period is projected to reach 23,186 MW, including 4,271 MW from gas-fired power plants, and 18,915 from combined-cycle power plants. (*)