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PLN to use LNG in 52 power plants to help reduce oil imports
The Energy and Mineral Resources Ministry issued a decree dated Jan. 10 ordering PLN to only use liquefied natural gas (LNG) in 52 power plants.
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Two workers have a discussion at the Badak liquefied natural gas (LNG) plant in Bontang, East Kalimantan. The government has asked state-owned electricity company PLN to use LNG in a number of its power plants. (Courtesy of/badaklng.co.id)
T
he government has ordered state-owned electricity company PLN to use natural gas in some of its power plants in order to reduce Indonesia’s oil imports and to increase usage of cleaner fuel sources.
The Energy and Mineral Resources Ministry issued a decree dated Jan. 10 ordering PLN to use liquefied natural gas (LNG) in 52 diesel power plants that will be later modified to enable them to use gas.
The ministry had also assigned state-owned oil company Pertamina to supply the gas. The program’s purpose, as noted in the decree, is to reduce the trade deficit and to support the energy diversification program.
PLN president director Zulkifli Zaini said on Jan. 28 that the program would reduce the company’s diesel consumption from 2.6 million kiloliters (kL) last year to 1.6 million kL “with estimated operational cost savings at Rp 4 trillion (US$293.9 million).” The company has two years to execute the program.
The so-called “power plant gasification” program is part of a larger government plan to reduce Indonesia’s oil imports, which have become a major contributor of Indonesia’s trade deficit. Indonesia’s non-oil and gas exports booked a surplus of $6.15 billion in 2019. However, due to the deficit of $9.35 billion in oil and gas trade, the trade balance suffered a deficit of $3.2 billion in the year.
The gas will be used mostly in existing power plants located in lesser-developed eastern Indonesia. PLN has not built coal-fired power plants in remote areas because of the difficulty of transporting coal in such areas.
Zulkifli said the production of gas would occur at power plants in Sumatra, Kalimantan, Bali, Nusa Tenggara, Sulawesi and Papua.
