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Posco launches SE Asia'€™s first off-gas power plant

A unit of South Korea’s Posco Energy has officially inaugurated the completion of a 200-megawatt gas waste power plant within an integrated steel mill complex in Cilegon, Banten

The Jakarta Post
Jakarta
Sat, January 18, 2014

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Posco launches SE Asia'€™s first off-gas power plant

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unit of South Korea'€™s Posco Energy has officially inaugurated the completion of a 200-megawatt gas waste power plant within an integrated steel mill complex in Cilegon, Banten.

The plant, built and operated by PT Krakatau Posco Energy (KPE), uses gas emitted as a byproduct of Krakatau Posco'€™s integrated steel mill, which officially began operation in December. The power plant was inaugurated on Thursday.

KPE is a joint venture between South Korea'€™s Posco Energy and PT Krakatau Daya Listrik (KDL), a PT Krakatau Steel subsidiary, with shares of 90 percent and 10 percent, respectively.

Referred to as an integrated steel mill off-gas power plant, the power plant, the construction of which started in September 2011, is the first of its kind in Southeast Asia.

'€œThrough the inauguration of the power plant, Posco Energy will actively take part in the development of power projects in Southeast Asia and expand its global presence in cooperation with KDL,'€ Posco Energy chief executive officer Oh Chang Kwan said in a statement.

By using gas emissions from the integrated steel mill, the plant will help the mill obtain an energy recycle rate of 98 percent and reduce its carbon dioxide emissions by up to 1 million tons per year.

Krakatau Posco'€™s current steel mill consists of a sintering plant, a coke oven plant, a plate mill and a blast furnace. The company spent US$3 billion on its current steel mill and will invest the same amount in the second phase of development.

The steel mill was inaugurated last month in the presence of President Susilo Bambang Yudhoyono and First Lady Ani Yudhoyono, Industry Minister MS Hidayat and State-Owned Enterprises Minister Dahlan Iskan.

South Korean steel giant consortium Posco owns 70 percent of Krakatau Posco, while the remaining 30 percent is owned by state-owned iron and steel producer PT Krakatau Steel.

Krakatau Posco'€™s current integrated mill has a production capacity of 1.8 million tons of slab and 1.2 million tons of steel plates a year and will double production to 6 million tons in total after the completion of the second phase of development.

From the total steel to be produced this year, around half will be for the domestic market, while the remainder will be exported.

Domestic steel consumption increased 6 to 9 percent last year from 10.4 million tons in 2012, according to the Indonesian Iron and Steel Industry Association.

Indonesia currently imports between 35 and 40 percent of the total annual steel demand due to limited capacity in the local industry.

'€œThe presence of PT Krakatau Posco [with its integrated steel mill] will be the answer to meeting domestic demand for steel,'€ Krakatau Steel president director Irvan K. Hakim said recently.

He said he expected the completion of Krakatau Posco'€™s steel mill would result in the company controlling 60 percent of the market this year, since Krakatau Steel accounted for around 42 percent of the domestic market last year. (koi)

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