PLN, Amerada Hess to sign gas deal Wednesday

Wednesday, December 4 2002 - 12:33 AM WIB

State power firm PT PLN is scheduled to sign on Wednesday a head of agreement with natural gas producer Amerada Hess on gas purchase and sale which is expected to materialize in 2004, Bisnis Indonesia daily reported.

The agreement entails that Amerada will sell natural gas to PLN at US$2.38 per million British thermal unit (MMBTU), down from the $2.53 currently paid by PLN for gas from BP and Kodeco, the newspaper quoted as saying PLN?s director of operation Bambang Hermiyanto.

The natural gas to be supplied by Amerada will be for PLN?s coal-fired/combined cycle power plant in Gresik, East Java. The gas will come from Amerada?s gas field in Ujung Pangkah, off the East Java coast.

PLN and Amerada will sign a memorandum of understanding to follow up on the head of agreement, but Bambang did not say when.

?We are not clear yet about the details of our contract. What is clear is that it will be a 12-20 year contract,? Bambang said.

The Gresik power plant has capacity to generate 2,100 megawatts (MW) of electricity, of which 600 MW (2x100 MW and 2x200 MW) are generated by its coal-fired unit and 1,500 MW (3x500 MW) by its combined cycle unit.

Presently, the plant also use fuel as its source of energy after natural gas supply from BP dropped, Bambang said.

So far, the Gresik power plant has received 282 MMBTU of natural gas from BP and Kodeco. Of the 282 MMBTU, 242 MMBTU of gas come from BP and the remaining 40 MMBTU are from Kodeco.

PLN and other gas consumers in East Java has suffered acute gas shortage over the past months after gas supply from BP?s Kangean Block dropped sharply due to reserve depletion. (*)

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