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View all search resultsLNG price surge a 'wake-up call' over import reliance, PLN warns
PLN reports that gas reserves for power plants stand at roughly 12 days of operation (HOP), with coal reserves at 15.9 operating days as of April.
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The Suralaya coal-fired power plant is pictured on Oct. 31, 2023, in Cilegon, Banten. (AFP/Ronald Siagian)
S
oaring global liquefied natural gas (LNG) prices serve as a stark “wake-up call” over the nation’s dangerous reliance on imported energy, the president director of state-owned electricity company PLN, Darmawan Prasodjo, has warned.
Speaking before House of Representatives Commission XII overseeing energy and mineral resources on Monday, Darmawan detailed how escalating geopolitical tensions had pushed global oil prices briefly above US$100 per barrel, a surge that directly drove up LNG prices due to their correlation with crude oil.
PLN noted that LNG prices on the spot market have reached around $19-20 per million British thermal units (MMBTU). Darmawan calculated that this translates into a fuel cost alone of nearly 14 US cents per kilowatt-hour (kWh) for electricity generation.
Fortunately, he noted, Indonesia still receives a fixed-price gas allocation from domestic sources.
However, global supply constraints are mounting, with production disruption in Qatar amounting to around 5 million tonnes per year, a shortfall expected to take up to five years to restore.
"So what about the geopolitical situation? This is a wake-up call," he said.
He went on to contrast the situation with prices on the Japan-Korea LNG market, where LNG is priced at $9 per MMBTU, suggesting that while affordable cargoes remain available for now, the window may close.
