PLN offered shale gas from America

By Godang Sitompul

State owned electricity firm PT Perusahaan Listrik Negara (PLN) has been offered to import shale gas from the United States in the form of LNG worth US$11-12 per mmbtu.

Suryadi Mardjoeki, PLN?s Fuel Oil and Gas Division Head, said PLN is considering taking the offer in anticipation of a possible shortage of gas or LNG supply for its power plants in the future.

Furthermore, the gas is cheaper compared to the price the firm is paying for LNG supplies from the domestic producers.

?There are two American companies which made the offer. They offer the gas at the price of $11-12 per mmbtu on PLN?s locations here, including the regassification cost of around $2-3 per mmbtu, on the assumption of the Henry Hub price of $4 per mmbtu,? Suryadi said, adding the American companies promised to start delivering the gas in 2017. He did not disclose the name of the US companies.

Suryadi noted that PLN put the LNG import into option on the prospect that LNG supplies from the local LNG producers may not be enough to meet the firm?s needs in the future. Next year, for instance, the firm needs around 50 cargoes of LNG, including 30-32 cargoes for its power plants in West Java, Muara Karang and Tanjung Priok (both in Jakarta), 12 cargoes for its power plants in Sumatra and eight cargoes for its power plants in Makassar (South Sulawesi) and Bali. However, the firm has only secured 34 cargoes of LNG, consisting of 22 cargoes from the Bontang LNG plant in East Kalimantan and 12 cargoes from the Tangguh LNG plant in West Papua.

"We need to secure another 16 cargoes. I don?t know where to get them. In a (recent) coordination meeting, SKK Migas asked PLN to make a proposal on the amount of gas it needs so that (the agency) can decide whether to reduce the LNG exports and divert it to the domestic market or other options,? he said.

Editing by Johannes Simbolon