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s part of an attempt to strengthen its footing as an integrated energy company, state-owned oil and gas giant Pertamina is taking part in a joint project to develop a power plant in North Sumatra.

The company sealed a deal with Japanese Sojitz Corporation and a local firm PT Pembangunan Prasarana Sumatera Utara to work on a 1 x 250 megawatt (MW) gas-fired power plant in North Sumatra. The cost of the project is estimated at US$250 million.

The development is also expected to help the government solve electricity shortages in the area, according to Pertamina senior vice president for gas and power Djohardi Angga Kusumah.

'€œWe are targeting that the power plant will be on stream in 2019. By that time we are expecting to ease the government burden on electricity shortages in the area,'€ Djohardi said.

Figures from the Energy and Mineral Resources Ministry show that the electrification ratio in the country has reached around 87 percent. However, the gap among areas is too wide as some areas have a ratio below 50 percent, while some other areas have no sufficient electricity reserves margin; the ideal number is usually around 30 percent of the total capacity. The northern part of Sumatra is one of the areas with no sufficient reserves, meaning that minor disruptions can trigger blackouts.

The northern part of Sumatra is in need of an additional 700 to 800 MW in electricity supply to avoid further blackouts.

Pertamina estimated that the power plant would need around 35 million standard cubic feet per day (mmscfd) in gas. The power plant will receive gas processed at Pertamina'€™s Arun regasification terminal and delivered through the firms pipeline network, according to the company'€™s vice president for gas and power commercialization, Ginanjar.

He added that the companies in the agreement had performed a preparatory feasibility study of the project since last year and found out that the project would be in line with electricity firm PT PLN'€™s electricity procurement plans under the government'€™s 35,000 MW program.

'€œWe have presented the project to the electricity directorate general and we will be pleased if we can be directly appointed by PLN to move forward with the project,'€ Ginanjar said.

He added that there were six power plants developed in North Sumatra and Aceh that Pertamina planned to develop further. However, he declined to give further details.

The government is currently working on the 35,000 electricity procurement program, which is expected to be fulfilled by 2019. PLN also determines the power plants to be developed, including its area and capacity, before an open bidding process for projects begins that are developed by independent power producers.

North Sumatra acting governor Tengku Erry Nuradi said he expected more power plant development in the area, which hosts a number of strategic industries to be developed.

'€œWe at least have four strategic projects, including the Kuala Tanjung and Sei Mangkei industrial zones. A lot of industries are in need of electricity,'€ he said.