PLN opens bidding for two gas-fired power plants

State-owned power utility PT PLN revealed on Monday that it would begin the tender process for two gas-fired power plants in Bengkanai, Central Kalimantan, and in Bontang, East Kalimantan, with a combined capacity of 330 megawatts (MW).

PLN construction director Nasri Sebayang said the Bengkanai power plant (280 MW) would be built in two phases and was scheduled to be complete in 2014.

Bengkanai would receive its gas supply from the Bengkanai field, which is operated by Salamander Energy, PLN president director Nur Pamudji reported.

The gas sales agreement with Salamander had been signed last year. Under the agreement, Salamander will supply 20 billion British thermal units per day (Btud). The price is pegged at US$4.79 per million Btu with possible escalation of 3 percent.

Delivery of gas will begin in 2013 for a 20-year contract period lasting through 2033.

The operation of the Bengkanai power plant would allow the company to save up to Rp 1 trillion ($111.06 million) a year from reduced oil-based fuel consumption, Nur Pamudji said.

Gas supply for the power plant will be channeled through two methods. As many as 11 billion Btud will be sent via pipeline while the remaining 9 billion Btud will be stored in the form of compressed natural gas (CNG).

In addition to the Bengkanai and Bontang power plants, PLN also has plans to build a gas-fired power plant in Tanjung Batu, East Kalimantan, with a capacity of 50 MW and another in Makassar, South Sulawesi, with the same capacity.

The two power plants will use CNG as the primary energy source. The Makassar plant will receive its gas supply from the Sengkang block, operated by Energy Equity Epic (Sengkang).

The investment required to build a gas-fired power plant is $1 million per MW.

PLN has started the construction of CNG storage facilities in Jambi. The CNG will be used during peak hours to improve operational efficiency. The CNG installation is planned to be built near the Sei Gelam 1 gas well with production capacity of 2.5 billion Btud.

Nasri also said that PLN planned to convert between 30 and 50 billion Btud of gas from the Terang Sirasun Batur field off East Java, operated by Kangean Energy, into CNG. The field was scheduled to supply gas to the power company in May 2012 with a total volume of 150 billion Btud.

The company has also signed a cooperation contract with Italian consulting company RINA for the construction of a marine CNG system to transport CNG from Gresik in East Java to Lombok in West Nusa Tenggara.

For the pilot implementation, the company would try to ship between 3 and 6 billion Btud. The project would be the first marine CNG system in the world. The gas would be used during peak hours (between 5 p.m. and 10 p.m.) and would replace the use of 51 million kiloliters of oil-based fuels a year.