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tate-owned electricity firm PLN and state-run gas company PT Perusahaan Gas Negara (PGN) are currently discussing a gas-supply renewal agreement for the former’s Muara Tawar power plant in Bekasi, West Java, for which the current agreement expired on March 31.

PLN oil and gas head Chairani Rachmatullah said over the weekend that her firm had signed a temporary gas-supply agremeent with PGN while waiting for talks to reach a conclusion.

“We haven’t signed the contract renewal, just a temporary agreement that states that PGN still has gas supplies for PLN and PLN will buy gas from it,” she said over the phone.

Several changes would be made to the agreement, Chairani continued, as her firm had requested a more stable gas supply for Muara Tawar power plant after the launch of its compressed natural gas (CNG) storage, and she expressing hope that the talks would be concluded soon.

Muara Tawar, which has an installed capacity of 2,050 megawatts (MW) and supplies electricity for Java and Bali, was operated by PLN subsidiary PT Pembangkit Jawa Bali (PJB) as a peaker generator that needs a higher gas supply during peak hours compared to during normal hours. The plant requires 300 billion British thermal units per day (BBTUD) of gas during peak hours but only 100 BBTUD outside them. Meanwhile, PGN and Pertamina EP supply around 180 BBTUD of gas to Muara Tawar plant.

The CNG storage will save excess supply during normal hours for use during peak hours.

“The services and the [standard operating procedure] must change because we have asked for a less-fluctuating supply,” Chairani said, adding that PGN supplied between 79 BBTUD and 100 BBTUD of gas to Muara Tawar.

PGN director Nusantara Suyono said his firm was negotiating the renewal agreement with PLN.

“We are talking about the gas pricing and the volume,” he said, without elaborating further.

PGN corporate secretary Heri Yusup wrote in a statement that his firm was committed to supporting PLN in its provision of electricity nationwide and of the government’s 35,000 MW program through a sustainable gas supply and reliable infrastructure.

“PGN and PLN are discussing not only continuity of gas supply but also technicalities, such as adjusted gas volume to cater for PLN’s power plants’ demands that increase every year,” he said.

Currently, PGN’s pipelines supply natural gas to more than 107,690 homes, 1,857 small and medium sized enterprises and 1,529 industries and power plants across North Sumatra, South Sumatra, Riau Islands, Lampung, Jakarta, Banten, West Java, Central Java, East Java, North Kalimantan and Sorong in Papua. The existing gas pipes distribute 1,591 million standard cubic feet of gas per day (MMSCFD) to PGN customers.

The publicly listed company has set a goal of developing an additional 1,680 kilometers of pipeline by the end of 2019 to deliver gas into more of the archipelago.

Nusantara said that his firm had allocated US$500 million in capital expenditure this year, a flat amount compared to last year, for maintenance and PGN mainstream and downstream business.