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ndonesia, which largely depends on fossil fuels for energy security, is set to launch its first power plant using unconventional gas coal bed methane (CBM) reserves this year.

Upstream oil and gas regulatory special task force SKKMigas chief Hadi Prasetyo said on Wednesday Virginia Indonesia Co. (VICO), which operates Sanga-Sanga block, will supply CBM to a gas-fired power plant in Sangatta, East Kalimantan.

The Sangatta power plant is owned by utility firm PT PLN. Construction was completed at the end of 2012.

VICO, a joint venture between British giant BP and Italy’s ENI, will supply half a million metric standard cubic feet per day (mmscfd) of CBM from 15 wells on the block.

The plant is able to generate between two and four megawatts of power.

“The CBM-powered plant will provide electricity to around 4,000 households in the area,” Hadi said at a meeting between the regulator and VICO Indonesia’s executives in Balikpapan, East Kalimantan.

Supplying CBM to the plant will mean VICO will maximize the dewatering process from the wells.

 Indonesia’s CBM production is still very small as most of the projects are still in the exploration phase or dewatering process.

 VICO Indonesia general affairs and communication manager Lies Tjokro said on the sidelines of the meeting that the company would continue to evaluate the CBM reserves at its Sanga-Sanga block for the next three years while continuing to supply gas to the plant.

 “I cannot confirm yet on how much CBM we can produce in the coming years as we will need the next three years to study before submitting a plan of development to SKKMigas,” she said.

The Sanga-Sanga block, operated by VICO, provides conventional gas to the nearby Bontang liquefied natural gas plant.

The current production-sharing of the block expires in 2018 but, according to SKKMigas, there has been no proposal from the firm’s shareholders to extend the contract.

CBM is a form of natural gas extracted from coal beds and one of the newest energy sources in countries such as Canada and the US. Gas contained in CBM is mainly methane and trace quantities of ethane, nitrogen, carbon dioxide and few other gases. The intrinsic properties of the coal in question determine the amount of gas that can be recovered.

Indonesia’s CBM reserves are estimated to be around 453 trillion cubic feet mainly in Sumatra and Kalimantan.

Indonesia, which quit from the Organization of the Petroleum Exporting Countries (OPEC) in 2008 after becoming net oil importer, currently relies on fossil-based, subsidized gasoline to fire the nation’s power plants and has been shifting to traditional energy sources such as coal to fire power plants as well as developing alternative energy sources.

CBM and geothermal-fired power plants are two of the latest such developments but have yet to show much progress.

Other firms have also been developing CBM-based energy, including state-owned energy firm PT Pertamina and publicly listed PT Medco Energy International.