Uncertainty clouds gas supply to Batam PLN

State electricity company PLN remains uncertain as to when it will get natural gas supplies from state owned gas supplier PT Perusahaan Gas Negara (PGN) for its power plant in Batam despite that both have agreed on the price for the gas, Koran Tempo reported on Monday.

PLN, PGN and American firm ConocoPhilips, which will supply the gas to PLN through PGN, agreed early this month on the price for the gas. However, the oil and gas sector's upstream regulating body (BP Migas) has yet to approve the agreemen, the paper said.

PLN Batam's president director Eri Ifyandri said BP Migas must approve the gas sale agreement immediately and appoint ConocoPhilips as the seller of gas PGN. As long as this is not done, PLN Batam will not get the gas from PGN for its gas-fired power plant at Panaran.

?We are still waiting for the approval from BP Migas of the purchase and sale agreement between PGN and ConocoPhillips,? Eri told the Koran Tempo over the weekend.

Eri is worrying if BP Migas keep on delaying its approval, there is a possibility of a power crisis in Batam. The reason is that the Panaran power plant with a capacity of 55 megawatts is projected to supply the half of the entire Batam?s electricity need, which is around 125-130 megawatts.

Early this month, PLN, PGN and ConocoPhilips agreed that 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.

The price does not include $0.075 per MMBTU in 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. (*)