PLN to open tender for "repowering" of its power plants next year

The tender for the repowering of state-owned electricity company PLN's three major combined cycle power plants, including coal-fired power plant Muara Karang, coal-fired power plant Tanjung Priok, and coal-fired power plant Muara Tawar is likely to be launched early next year.

Director General of Electricity Jack Purwono said in Jakarta late last week that state electricity firm PT Perusahaan Listrik Negara( PLN) could open the tender for the repowering of the three plants following an agreement made by state-owned oil and gas company PT Pertamina and state-owned gas distribution company PT Perusahaan Gas Negara (PGN) recently to provide additional gas supply for the three power plants.

The minister said that Pertamina would provide additional gas supply of 100 million cubic feet per day early next year and PGN would also provide 100 million cubic feet per day in the middle of 2007.

The two suppliers set the price of gas at US$3.5 per MMBTU, Purwono said.

The tender for the repowering projects expected to increase the power capacity of Muara Karang and Tanjung Priok power plants by 500 MW respectively and Muara Tawar power plant by 225 MW has been delayed due to uncertainty about the additional gas supply for the power plants.

Japanese Bank for International Corporation (JBIC) which has pledged to provide loans of up to 73.9 billion yen for the projects would not disburse the loans if there is no assurance of the additional gas supply for the three power plants.

Currently, Muara Karang plant has a production capacity of 1,200 MW, Tanjung Priok about 1,300 MW and Muara Tawar about 900 MW. All of the power plants have been designed to be able to use both diesel oil and gas.

PLN will increase the use of gas in the operation of the three plants to reduce the high operating costs resulting from the increase in oil prices. (*)