PLN, PGN interested in gas from Masela project
Wednesday, June 21 2017 - 03:04 AM WIB
Kontan quoted PLN Head of Corporation Communications Division, I Made Suprateka as saying that the company is considering to buy gas from the Masela block project to help ensure future supply for new power plant projects. He pointed out that about 26.7 percent of power plant projects to be procured by the utility under its 2017-2026 electricity procurement business plan (or RUPTL) will be gas-fired or combine-cycle power plants.
He, however, said that the company was hoping for the Masela gas to have similar price as the one offered by BP (operator of Tangguh LNG plant in West Papua) for the PLTGU Jawa-1 combine-cycle power plant project at 11.2 percent of Indonesia Crude Price (ICP) plus US$0.4 per mmbtu for transportation cost, in line with the Minister of Energy and Mineral Regulation No 11/2017, which caps gas price for power plant at 11.5 percent of ICP.
Meanwhile, PGN President Director Jobi Triananda Hasjim was quoted as saying that the IDX-listed firm was also interested to buy gas from the Masela project to meet demand from industries in the eastern part of Indonesia. He said that it?s also possible for PGN to buy LNG from the project to help meet future gas demand in Java.
The Ministry of Industry has earlier said that at least three companies including state-owned fertilizer firm PT Pupuk Indonesia, and private-owned PT Elsoro Multi Prima, and PT Sojitz Indonesia are interested to buy gas from the Masela project as three plans to develop fertilizer and petrochemical manufacturing plants in Maluku. Pupuk Indonesia, in particular has demanded for a gas price of between US$3-3.5 per mmbtu to make its planned project economically feasible, much lower than the $5-6 per mmbtu initially estimated by the government.
Inpex Corp, operator of the Masela block, said late last month it has started making preparations to implement the required pre-front end engineering design (pre-FEED) for the planned Abadi gas field development project in the block.
According to a directive of the upstream oil and gas authority SKK Migas, Inpex will develop an onshore LNG production facility with a capacity of 9.5 million tons per annum plus a pipeline gas production capacity of 150 mmscfd.
Once the pre-FEED phase has been completed, Inpex will then proceed with formulating a revised plan of development (POD) for the Abadi field project, which the ministry targeted to start production in 2026. Once the revised POD has been approved, Inpex will then negotiate for the final FEED including discussions on required incentives such as tax. (*)