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PLN worried about gas supply
Amid heightened demand for electricity, PT PLN is struggling to source gas to feed its power plants
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Amid heightened demand for electricity, PT PLN is struggling to source gas to feed its power plants.
Chief of PLN's oil-based fuel and gas division Suryadi Mardjoeki said the company would need 28 cargos of liquefied natural gas (LNG) this year.
The number will double to 56 cargos in 2015 and is expected to increase to 60 the following year.
Of the total cargos needed next year, PLN has secured 22 from the Bontang plant in East Kalimantan and 12 from the Tangguh plant in Papua.
'We have requested that SKKMigas [the Upstream Oil and Gas Regulatory Task Force] allocate us LNG. If there is no allocation, we must import,' Suryadi said.
Indonesia is estimated to have a quite significant amount of natural gas resources ' around 104 trillion standard cubic feet (tscf) in proven and 48 tscf in potential gas reserves.
That figure makes the country the 13th largest owner of proven natural gas reserves in the world and the second-biggest in the Asia-Pacific region after China, according to the International Energy Agency.
So far, domestic utilization of gas has been slow, resulting in the country becoming a major LNG exporter.
The government has called for higher domestic utilization of gas in an attempt to reduce dependency
on oil.
Figures from SKKMigas showed that domestic gas distribution reached 52.1 percent of total production in 2013, double the 2003 figure of only 25 percent. This year, SKKMigas is targeting 57.3 percent of total gas produced to be sold to the domestic market.
Along with the government's attempt to boost domestic consumption, PLN has been trying to increase gas usage to reduce oil fuel consumption, which is considered more expensive.
PLN is now the biggest gas consumer in the domestic market.
Under its electricity procurement business plans (RUPTL) for the period of 2013 to 2022, PLN said it also would turn to compressed natural gas (CNG) or LNG to reduce oil-fuel consumption during the peak of power demand.
However, concerns over supply sustainability and competition for gas allocation have worried the state-owned company.
'PLN is finding it difficult to obtain access to big natural gas resources because most of the large gas resources are already attached to long term selling agreements with buyers overseas,' the company said in the RUPTL.
PLN started to enjoy delivery of LNG from the Tangguh plant last year as part of the 'Sempra diversion' program, which is a government initiative to divert most of the LNG produced by Tangguh previously delivered to US-based Sempra Energy to the domestic market.
SKKMigas deputy for commercialization control Widhyawan Prawiraatmadja has said PLN received 5 cargos through the Sempra diversion program last year and would get 12 this year.
PLN is also expecting to sign an agreement of gas supply from Tangguh train 3, which is now under development and is expected to be ready to produce 3.8 million tons per annum in 2019.
Widyhawan said SKKMigas expected more gas be absorbed by domestic buyers. However, the realization of gas allocation is another challenge.
'Domestic [buyers] sometimes ask for some but then cancel,' Widhyawan said.
Poor gas-distribution infrastructure and delayed gas-field development projects due to prolonged permit issuance are among the challenges faced when trying to boost domestic gas consumption.
