PLN: Gas utilization in North Sumatra to increase

State-owned electricity firm PT PLN said that it will continue to increase the use of gas for electricity generation in North Sumatra as part of efforts to help lower production cost.

PLN said in a statement on Friday following a visit by Minister of Energy and Mineral Resources Ignasius Jonan to the PLTGU Belawan gas and coal-fired power plant, gas utilization in the province is estimated to increase to 137 mmscfd by the end of this year from the current 95 mmscfd once the Pasir Paya mobile power plant (75 MW) and the block I, unit 2 of the PLTG Belawan gas-fueled power plant start operating with gas.

PLN said that in the following year, gas utilization will further increase to 197 mmscfd in line with the operation of the 240 MW Belawan marine vessel power plant (MVPP) fueled by gas.

Amir Rosidin, PLN Director of Business for Sumatra Region, said the higher gas supply will increase efficiency as it reduces the use of costlier fuel oil in the Belawan power generation center. ?The additional gas supply for power plants will strengthen electricity supply particularly in North Sumatra,? he said.

Meanwhile, Jonan reiterated the ministry?s intention to lower gas distribution cost in the country in bid to cut down gas price for industries including power plants such as PLTGU Belawan, which in turn would lower the electricity supply cost (or also known as BPP) of PLN and the selling price of electricity to the public.

?With the lower BPP, automatically (electricity) price will be cheaper. Therefore we must review the gas distribution cost. The point is to make electricity price affordable for the people,? he said as quoted by the PLN statement.

As has been previously reported, the minister plans to soon issue a new regulation that would among others limit the margins and returns of the midstream and downstream players in the gas supply chain in a bid to bring down the price of gas to consumers.

The PLTGU Belawan, with combined capacity of 720 MW, accounts for 25 percent of electricity supply in North Sumatra. Established 25 years ago, the power plant was initially fueled by high speed diesel, but has been using gas since 2015, with supply coming from Tangguh LNG plant in Papua Province, converted into gas at the Arun LNG regasification facility in neighboring Aceh province, the gas of which is then transmitted via a 300-km pipeline to the power plant.

PLN said that the use of gas at the power plant has managed to lower BPP of the plant from Rp 2,926 per kWh in 2014 to Rp 1,255 per kWh in 2017.

Elsewhere, Amir said that North Sumatra is expected to enjoy electricity reserve margin of around 20 percent by the end of this year with the recent operation of the Sarulla geothermal power plant unit 1 (100 MW) and the upcoming operation of the unit 2 (also 100 MW), and the upcoming operation of the 240 MW MVPP, plus the transfer of 200 MW of electricity from South Sumatra via 275 kV transmission line.

He added that the reserve margin will increase to an ideal level of 30 percent in 2019 in line with the operation of the Pangkalan Susu PLTU coal-fired power plant unit 3 and 4 with capacity of 2x200 MW.

Editing by Reiner Simanjuntak