PLN plans new US$60m power plant in Bontang

State electricity firm PT PLN plans to build a new US$60 million gas-fired power plant in Bontang, East Kalimantan, this year, which will provide up to 150 megawatts (MW) of additional power to the area, The Jakarta Post reported on Monday.

Construction is expected to be completed within the next two years, PLN?s deputy director for primary energy, Tonny Agus, was quoted as saying Sunday by Antara, with the plant itself to be fully operational by 2009.

Tonny said the plant would become the primary node in a grid connecting the provincial capital Samarinda, industrial port city Balikpapan and the Bontang, Sangatta and Tarakan oil fields, and supplying the region?s increasing electricity demand.

Being gas-fired, the plant will also help reduce PLN?s dependency on oil-based fuels for its power plants. Of the province?s 366 MW of installed capacity, 82 percent still comes from oil-fired plants.

The new Bontang power plant is expected to require a gas supply of 30 million metric cubic feet per day (MMCD).

Tonny said PLN had signed an agreement with French oil firm Total Indonesie, operator of the nearby Senipah field, to supply two MMCFD, of gas to the plant. PLN is looking to secure additional gas supplies, as the currently secured supply will only be enough to generate between five and 10 MW of power.

The government wants to increase the use of the country?s abundant supplies of liquefied natural gas (LNG) and coal for power generation to reduce its subsidies for oil- based fuels and electricity, which have strained the state budget amid the recent rise in global oil prices.

Oil still accounts for 60 percent of the country?s total energy consumption mix, while LNG and coal is mostly exported.

President Susilo Bambang Yudhoyono recently said the government would after 2009 divert most of the country?s LNG exports for domestic industries.

This includes PLN?s power generation needs, with the firm planning to build eight non-oil-fired power plants with a total capacity of 11,600 MW by 2009.

PLN recently invited bids for the construction of six power plants in Central Java, East Kalimantan, North Sulawesi, North Sumatra, Bali and East Java, with a combined capacity of 2,270 MW. (*)