PGN Committed to Supplying Gas for PLN’s Power Plants

BANDUNG, October 27 (EngineeringDaily) -- Despite being one of the most prolific natural gas producers in the world, Indonesia’s gas power plants are having trouble obtaining gas fuel. The plants often have to rely on fuel oil, which is much more expensive. These conditions have led to a very large electricity subsidy in the country.

To overcome this problem, state-owned company Perusahaan Gas Negara (PGN) and PT Generation Java-Bali (PT PJB), a subsidiary of state-owned electricity company PT PLN, have formed a partnership to ensure a gas supply for the domestic power plants. The two companies have signed a Memorandum of Understanding (MOU) regarding the use of this gas.

Director of Exploitation for PGN Jobi Triananda Hasjim stated that this agreement aims to support the government in accelerating the conversion of fuel oil to gas fuel. Under the agreement, PGN will provide natural gas for PJB’s power plants.

One of the implications of this agreement is that PGN will have to build and develop massive natural gas infrastructure and supporting facilities. Therefore, the cooperation is actually broader than just the gas purchase agreement.

"We are also working in the broader field related to the business activities of subsidiaries and affiliates of both parties," Hasjim said. However, the company has yet to release the details of their investment and any development plans to be completed.

By Ismail Al Anshori