Petronas unit to construct Indonesian gas line

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 10 -- Pertronas exploration unit Petronas Carigali Sdn. Bhd. plans to build a 200-km pipeline to Indonesia’s Tambak Lorok electric power plant in East Java from the Kepodang gas block off Central Java, according to a senior government official.

Indoesia’s upstream oil and gas regulator BPMigas Deputy Chairman Hardiono said the pipeline, which is expected to come on stream by 2013, will have 120-200 MMcfd of gas capacity.

In February, PLN and Petronas agreed to a gas supply deal for the Tambak Lorok power plant, aiming to begin supplying the 1,358-Mw plant near Semarang in Central Java province in an unspecified “near future.”

Petronas said it would supply the plant with 100 billion btu/day of gas from the Kepodang field under a 10-year contract, as long as BPMigas agreed the volume, price, and other aspects of the arrangement. At the time, reports said the gas would be transported through a 120-km pipeline.

The deal was agreed soon after PLN formalized separate agreements covering 780 billion btu/day of gas with state-owned PT Pertamina and PT Perusahaan Gas Negara. PLN reportedly wanted to run all of its existing and planned gas-fired plants on gas instead of oil beginning in September 2011.

In May, however, PLN also said it would call a tender for the procurement of 1.3-1.5 million kl/year of high-speed diesel oil to meet the needs of its power plants in seven locations, among them Tambak Lorok.

PLN’s Primary Energy Director Nur Pamudji said the seven power plant locations, apart from Tambak Lorok, included Belawan in North Sumatra, Muara Tawar in West Java, Tanjung Priok in Jakarta, Muara Karang in North Jakarta, Grati in East Java, and Gresik in East Java.

Nur said the contract period was for 2010-14 and that the volume of the contract for the procurement of the fuel was 1.3-1.5 million kl for the seven plants. According to Nur, PLN’s need for fuel was estimated to reach 7.6 million kl this year.

At the time, Nur said PLN expected its oil-based fuel use this year could exceed its original target of 6.3 million kl by 21% because of a gas shortage.

“Our gas supply is being cut by 12.5% to 280 bcf from 320 bcf. So we have to offset this with fuel at our power plants,” said Nur, who blamed the cut in the gas supply on inadequate infrastructure.

“If we ask for supply from Total EP, they say okay but how to channel the gas,” said Nur, who explained that a pipeline and floating receiving terminal had been planned to transport gas from Kalimantan to Java.

But Nur also said the facilities would be insufficient and that distribution pipes were still needed to bring the gas to the end users. “PLN, therefore, has to buy oil fuel for which it will need 7.6 million kl/year,” he said.

In January, reports said that Indonesia had unveiled a long-term oil and gas management plan to attract $32 billion in investments for oil and gas facilities in 2010-14.

At the time, Indonesia said it plans to construct five natural gas plants in 2011: Blok A in Nanggroe Aceh Darussalam, Jambi Merang in Jambi, Randublatung in Central Java, Gajah Baru in Natuna, and Kepodang in East Java (OGJ Online, Jan. 18, 2010).

Contact Eric Watkins at hippalus@yahoo.com.



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