PLN needs more fuel, diesel oil to substitute dwindling gas supply
Monday, May 13 2002 - 12:29 PM WIB
BP has a contract to supply around 340 million cubic feet of natural gas per day to East Java customers including PLN to generate power, but production is already well short of that and expected to continue dropping.
"PLN needs more fuel oil and diesel oil through the end of this year, because the natural gas supply from the BP Kangean block for PLN (will) drop significantly in volume," PLN operation director Bambang Hermiyanto was quoted as saying by the newswires.
A Pertamina official said PLN has estimated it needs 772,000 kilolitres of fuel oil and 290,000 kilolitres of diesel oil to compensate for the natural gas supply fall from BP this year.
He said PLN will require at least 1.2 million kilolitres of fuel oil and diesel oil combined in 2003 to compensate for the expected drop by then.
Mines and energy officials have said gas supply from the Kangean block is currently at 200 million cubic feet per day and would fall to 160 million cubic feet per day by the end of this year.
PLN's finance director Parno Isworo said the firm would have a loss this year, compared with profit of 180.1 billion rupiah ($19.4 million) in 2001.
"We are still calculating how much PLN will lose this year because we have to buy more fuel oil and diesel oil to keep our generator on," Isworo said.
A mines and energy official has said Indonesia will need 54 million kilolitres of oil products in 2002, compared with 52.7 million budgeted.
BP has revoked its preference right to supply natural gas to East Java, a Pertamina official said.
"Pertamina will ask several companies who have natural gas fields around East Java, including Amerada Hess, to make preparation for production and to supply East Java customers," the official told Reuters.
"It take two to three years for the firms to prepare before producing the gas," the official said.
Under the contract signed in 1980, the Kangean natural gas block was originally operated by Arco but was taken over by BP when it acquired the U.S. firm in 2000. (*)