PLN and Conoco to build new power plant in Batam

The branch office of state owned electricity PLN in Batam will tie up with PT Conoco to build gas-fueled power plant on the island in a bid to improve efficiency, Bisnis Indonesia reported on Wednesday.

Ali Herman Ibrahim, a senior executive of PT PLN Batam, said on Tuesday that the two companies had conducted a number of discussions to seek the possibility of building the gas- fired power plant on the island.

The gas would be supplied from Conoco?s gas pipeline network which transmits gas to Singapore, Ali said, adding that the two companies were also still negotiating the gas price. ?The problem is they have not yet fixed the price of the gas,? he added.

According to him, the price of the gas sold to PT PLN Batam should be at least 20 percent lower than that supplied to Singapore to allowed the electricity company to provide a cross subsidy in the electricity pricing.

?With the use of gas, the power tariff would be Rp 35/kWh cheaper from the current Rp 100/kWh,? he said.(*)