PLN mulls LNG swap with Keppel

Petromindo|Thomas

State-owned electricity firm PT PLN is considering an LNG swap with Singapore?s Keppel Corporation Ltd in a bid to obtain cheaper gas for its mobile power plants (MPPs) in northern part of Sumatra.

PLN Director of Strategic Procurement I, Nicke Widyawati said on Wednesday that the LNG swap plan forms part of options under a previous MoU between the two companies for the development of gas storage facility that would serve the MPPs.

She said that under the plan, PLN will swap LNG it obtains from Bontang LNG plant in East Kalimantan with LNG from Keppel at the same price. Considering the distance between Singapore and Sumatra is shorter than distance between Sumatra and East Kalimantan, the final gas price for PLN including transportation and infrastructure costs is expected to be cheaper by making the swap.

But Nicke said that PLN is still in the process of making evaluation, hopefully to be concluded in the near future. She added that the two companies plan to amend the earlier MoU this week to include the LNG swap mechanism.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar earlier warned PLN that import of LNG must be carefully evaluated to make sure that the final gas price will not be expensive that would eventually lead to higher electricity tariff for consumers at home. (*)