Indonesia's PLN gives boost to small-scale demand for LNG

Singapore

THE imminent award of a contract for the supply of a mini liquefied natural gas vessel in support of state-run utility Perusahaan Listrik Negara's pilot plant in Bali marks an uptick for small-scale LNG demand in Indonesia.

It also bodes well for Singapore's push to become a transhipment hub for the clean burning fuel.

The Business Times understands that PLN is about to conclude a tender for a seven-year contract starting from January 2016 to transport LNG to a power plant of around 100 megawatts throughput planned in Bali.

Theo Lekatompessy, president of Jakarta-listed Humpuss Intermoda Transportassi, confirmed to BT that his company has emerged as the front-runner, together with a Japanese partner, for the contract now projected to be awarded in October.

Mr Theo said that the 20,000 cubic metre LNG tanker Surya Satsuma has been offered for the PLN contract, which will be the first in a series of mini LNG vessel contracts lined up to supply power plants being built under the state utility's independent power producer (IPP) scheme.

PLN has already kicked off a second tender for a small tanker of under 6,000 cubic metres to meet the requirement of a peaking unit at a 100 MW plant in Pontianak, Kalimantan.

Mr Theo sees PLN potentially drawing spot cargoes from Singapore to supply the small power plants under development.

In response to BT's query on the small-scale LNG opportunities in Indonesia, a spokesman for Singapore LNG, the operator of Singapore's only open-access, multi-use terminal on Jurong Island, said that its facilities are technically capable of carrying out reloading and break bulk operations for LNG carriers ranging from 60,000 cubic metres to 265,000 cubic metres in size.

"For smaller LNG carriers, the necessary topside equipment will only be installed when we are able to establish a viable business case," the spokesman said, in reference to the status of a third jetty reportedly planned to service LNG tankers of 10,000 to 40,000 cubic metres.

Its Jurong terminal is undergoing expansion to boost send-out capacity to 11 million tonnes per annum, up from six million tonnes per annum.

PLN is driving a countrywide small-scale LNG and power plant development plan to fulfil President Joko Widodo's pledge to provide 35,000 megawatts of electricity to Indonesians by 2019.

Indonesia is looking to increase the use of cleaner burning LNG for its power generation and industries over coal, which translates to a bulging gas deficit amid a slowdown in the country's upstream oil and gas developments.

National oil company Pertamina has projected that the shortfall in gas supplies from domestic production would triple to 4.5 billion cubic feet per day by 2025, from 1.5 bcfd, Reuters reported in April.