UPDATE 1: PLN to sign MoU for Tangguh LNG supply tomorrow
Wednesday, May 23 2012 - 08:42 AM WIB
State owned electricity firm PT Perusahaan Listrik Negara (PLN) is scheduled to sign on Thursday a Memorandum of Understanding (MoU) with BP Plc on LNG supplies from the Tangguh LNG plant in West Papua.
?The LNG is supposed to be shipped to (American firm) Sempra (Energy) but, instead, it will be diverted to meet the needs of PLN,? upstream authority BPMIGAS? Chairman R. Priyono said on Wednesday.
He said under the MoU, PLN will get 230 mmscfd of LNG supplies from Tangguh with "an option of receiving additional 100 mmscfd" and the LNG will be shipped to Jakarta Bay FSRU starting early next year. PLN will pay "at least" US$11 per mmbtu for the gas.
Minister of Energy and Mineral Resources confirmed the planned signing of the MoU. ?I?ll be there tomorrow,? he said.
The Jakarta Bay FSRU, also called West Java or Regas Satu FSRU, is now in the commissioning stage after receiving its first LNG supply from the Badak LNG plant in East Kalimantan. The floating LNG terminal, jointly owned by PT Perusahaan Gas Negara (PGN) and state owned oil and gas firm PT Pertamina, is capable of storing 125,000 cubic meters of LNG and delivering up to 500 mmscfd or 3.8 million tons per annum (mtpa) of regassified LNG. Under contract, the Badak LNG plant is only committed to delivering 1.6 mtpa to the FSRU, thus leaving the FSRU to run at half of its capacity.
According to PLN, the Badak LNG supply will only capable of meeting the gas needs of PLTGU Muara Karang combined cycle power plant in North Jakarta, which has a total capacity of 1,200 MW. PLN has another power plant in the same area, PLTGU Priok with a capacity of 1,400 MW for which PLN still uses expensive oil fuels to generate some power due to the lack of gas supplies from PGN and the ONWJ block operated by Pertamina Hulu Energi.
Tangguh has a long-term contract to sell 3.7 mtpa of LNG to Sempra. Under the contract, however, BP, the leader of the consortium that operates the LNG plant, is allowed to divert up to 50 percent of the annual volume by paying fee of $1 per mmbtu to Sempra.
Editing by Johannes Simbolon