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Jakarta Post

PGN faces potential US$17.3 million loss as sales contract ends at Kepodang gas field

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Fri, September 27, 2019   /   05:28 pm
PGN faces potential US$17.3 million loss as sales contract ends at Kepodang gas field Kalimantan Jawa Gas (KJG) technical and operational director Cahyo Triyogo (right), KJG regional manager Imam Supardi (center) and a field worker inspect gas supply from the Kepodang gas well in the Java Sea, which is channeled to the Tambak Lorok onshore receiving facilities (ORF) in Semarang, Central Java, in this file picture. (JP/Wahyoe Boediwardhana)

Publicly-listed gas company PGN announced on Thursday evening that its Kepodang gas field in Central Java province has stopped supplying fuel to a neighboring gas-fired power plant.

PGN said in a letter to shareholders that Kepodang had stopped supplies because a gas sales agreement between the field’s majority owner, Malaysian energy company Petronas, and the power plant’s owner, Indonesian utility company PLN, had expired on Monday night.

PGN corporate secretary Rachmat Hutama noted that the gas company might lose up to US$17.3 million in net profit due to lost business activity from upstream subsidiary Saka Energi Indonesia, which is the field’s minority owner, and from midstream subsidiary Kalimantan Jawa Gas, which channels fuel to the power plant.

In response, PGN plans to bring its case to the Paris-based International Chamber of Commerce and to the Indonesian Energy and Mineral Resources Ministry.

“The directors will do their best to prevent the occurrence or continuation of such potential losses,” Rachmat said.

PGN booked a net profit of $54.04 million in the first half of this year, which is one-third of the $179.39 million net profit booked in the same period last year.