PGN says gas supply to Panaran power plant continues despite price problem

State-owned gas distribution company PT Perusahaan Listrik Negara (PGN) continues supplying gas to Panaran 2 gas-fired power plant in Batam although an agreement over the new gas price has yet to be concluded, Kompas reported Tuesday.

"Although the agreement over the gas price in the new contract has not been reached, PGN is committed to continuing the gas supply so as to avoid power blackout in Batam and its surrounding islands," PGN's marketing executive in Batam, Sabaruddin said.

PGN and plant operator PT Dalle Energi Batam are negotiating the extension of the gas supply contract which expired on Jan. 6. PGN is offering a gas price based on the government's price reference of about $5.7 per MMBTU. The price is higher than the US$3.4 per MMBTU in the previous contract.

"The negotiation still continues as no agreement has been made over the gas price," Sabaruddin said.

The power plant, which has a capacity of 2 x 27.5 MW, started operation in August 2006. Under the initial agreement, PGN will supply gas around 4.4 million cubic feet per day (MMSCFD). (*)