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tate electricity monopoly PT PLN plans to seek additional natural gas supply from Australia and Papua New Guinea (PNG) to overcome a shortfall that has led to a significant increase in the company’s operating costs.

This year, the company is struggling to acquire more gas to reduce costs in producing power amid soaring global oil prices, PLN president director Dahlan Iskan said in Jakarta on Friday.

“We need around 1,800 million standard cubic feet per day [mmscfd] of gas, but we only receive 800 mmscfd from the government. If we our supply of gas was adequately met, we could save up to Rp 60 trillion [US$6.97 billion] a year,” he said.

Due to the shortfall, PLN currently only produces 9,800 megawatts of electricity from its gas-fired power plants, below the maximum capacity of 11,000 megawatts.

As reported earlier, PLN is also considering the possibility of importing liquefied natural gas (LNG) from Iran and Kuwait. The House of Representatives Commission VII overseeing energy demanded the company use more gas to boost
efficiency.

During a hearing at the House on Tuesday, the Golkar Party called on PLN to take back gas allocations from the Jambi Merang field in Jambi and the Lematang field in South Sumatra, which are currently allocated to state gas distributor PT PGN.

In April this year, PLN was scheduled to acquire an additional gas supply of 65 mmscfd from the Jambi Merang field under a 2006 contract. The gas was to have been supplied to power plants in Java through the South Sumatra-West Java (SSWJ) pipeline network run by PGN.

However, PLN primary energy director Nur Pamudji said the company had not received the additional supply. He claimed the gas would begin to be channeled “in the near future”.

Commission VII member Achmad Riyaldi from the Prosperous Justice Party, earlier suggested that the government return a 100 billion British thermal unit (bbtu) gas allocation to PLN that was currently allocated to PT Chevron Pacific Indonesia to support oil production at its Duri field in Riau.

The gas was initially allocated for PLN’s Muara Tawar power plant in Bekasi, West Java.

The power plant needs between 200 and 300 mmscfd of gas but only receives between 70 and 100 mmscfd from PGN. A 2008 contract stipulated that the two companies should supply 200 mmscfd.

The Tanjung Priok and Muara Karang power plants in Jakarta and West Java require a total gas supply of 300 mmscfd, but PT Pertamina Hulu Energi and PGN can only supply 130 mmscfd.

In addition to boosting the utilization of gas, PLN also aims to optimize power production from its coal-fired power plants. The company also has plans to build several new coal-fired power plants, including in Pemalang, Central Java.

Dahlan announced that PLN had appointed a consortium of 3 companies — JPower, Itochu Corporation and PT Adaro Energy — to build the Pemalang power plant, which would have a total generating capacity of 2,000 megawatts.

Despites protests from the Marubeni consortium, a losing party in the tender, the state company insisted on appointing the JPower consortium due to its technical excellence, he continued.

“This is our first ultra-super-critical power plant project. We have to be careful when choosing developers,” Dahlan said.