PGN and PLN will sign MOU agreement on new gas pipeline project

State owned electricity company PLN and state owned gas distributor PGN will sign a memorandum of understanding (MOU) agreement on the construction of a gas pipeline that will connect the South Sumatra-West Java gas pipeline and PLN?s gas receiving pipeline network in Jakarta and surrounding areas, Bisnis Indonesia reported on Thursday.

PLN?s Corporate Secretary Muljo Adjie AG said in Jakarta on Wednesday that MOU agreement on the pipeline project that would be worth about US$90 million would be signed later this month.

According to him, the planned gas pipeline would be used to mainly supply the Muara Tawar gas power plant which would be built in Bekasi, West Java from PGN?s South Sumatra-West Java gas pipeline. The power plant which would have a capacity of 6 x 100 MW would need between 40 million cubic feet per day (MMCFD) and 60 MMCFD.

The 485 million South Sumatra-West Java pipeline which was now under construction would be able to start operating in 2006, earlier from the initial schedule of 2007, Muljo said, adding that the Muara Tawar power plant which was scheduled for commercial operation in 2004 was expected to start getting the gas supply from the planned pipeline in 2007.

"Muara Tawar power plant would first use fuel before getting the gas supply from the new pipeline project," he added. (*)