U

nder pressure to improve operational efficiency, state-run electricity company PT PLN is faced with the uncertain fate of a 40 billion British thermal units (Btu) per day additional gas supply from the Corridor block in South Sumatera.

According to an initial plan, PLN’s Muara Tawar gas-fired power plant in Bekasi, West Java, would receive the gas supply last December. The gas delivery was to be regulated under a swap mechanism with the same amount of gas from the Gajah Baru field in the Natuna Sea.

PLN has a gas allocation of 40 billion Btu per day from the Gajah Baru field, which is operated by Premier Oil. But since there is no pipeline connecting the field to the Muara Tawar power plant, the only option available to PLN is to have gas delivered from the Corridor block, which is operated by ConocoPhillips, through the South Sumatera–West Java (SSWJ) pipeline.

In return, the Gajah Baru field will channel PLN’s gas allocation to ConocoPhillips’ buyers in Singapore.

But the finalization of the swap deal has been hindered by PLN’s fears that it would have to pay compensation if there were supply interruptions from Gajah Baru to Singapore.

Regulator BPMigas’ spokesperson, Gde Pradnyana, on Friday said that the power company should not worry about compensation because the agency would protect PLN if there were supply interruptions.

“The basic principle of the gas swap agreement is that buyers will receive the same amount of gas, but from a different source. If there’s a disturbance, we have prepared layered protection for PLN,” he said.

He said that he understood PLN’s concerns since the company was not used to dealing with foreign gas buyers, but declined to elaborate further on what protections would be offered.

“We’re optimistic that the agreement will come into [effect] in the near future. We hope it can be completed by the end of this month,” Gde said.

Separately, PLN president director Nur Pamudji said that the principles of the deal had been agreed, but discussions over some details, particularly around the compensation issue, remained tough.

“We don’t want to bear huge losses due to interruptions. We don’t want to take a decision in a hurry, we have to be very careful,” he said.

PLN currently operates 5,233 power plants across the country with a total capacity of 24,960 MW. A total of 1,151 plants are powered by natural gas.

The Muara Tawar power plant needs a gas supply of 223 billion Btu per day. However, as of early December, it has only been receiving 139 billion Btu per day.

The Energy and Mineral Resources Ministry granted approval for the swap agreement last October. The 40 billion Btu per day gas supply would reduce Muara Tawar plant’s oil-based fuel consumption by 6,000 barrels per day.

With that supply, PLN could save between Rp 2 trillion (US$222.46 million) and Rp 3 trillion every year.