PLN, PGN and ConocoPhillips agree on gas price for Batam power plant

State-owned power company PT Perusahaan Listrik Negara (PLN), state gas utility PT Perusahaan Gas Negara (PGN) and gas producer ConocoPhillips finally agreed on the price of gas to be supplied to gas-fired Panaran power plant in Batam, the Koran Tempo newspaper reported in its Tuesday edition.

The price for the natural gas will be US$1.85 per million British thermal unit (MMBTU) during the first 10-year period. But the price will be increased to $2.49 per MMBTU for the next five years. With this price, still PLN can save Rp 3.5 billion production cost per month.

The price does not include a rent fee of $0.075 per MMBTU for the pipeline (toll fee), which will be paid by PLN to PGN. Thus, PLN will pay on an average $2.6 per MMBTU during the first 10 years and $3.1 per MMBTU during the next 5 years.

PLN?s director for power generation and primary Ali Herman said the agreement was reached after negotiations between the three parties.

"It is a request from the seller (PGN), which was agreed by the purchaser (PLN Batam). It was also agreed by the oil and gas up stream regulating agency,? Ali said in Jakarta on Monday.

ConocoPhillips will supply the gas to PLN Batam from its Grissik gas field in South Sumatra. (*)