Jonan denies reports on LNG import from Singapore

Jakarta (ANTARA News) - Minister of Energy and Mineral Resources (ESDM), Ignasius Jonan, rebutted the reports on the import of liquefied natural gas (LNG) from Singapore.

"I think the news is not right. Singapore offers mini LNG tankers to channel our LNG to be used in power plants in the western Indonesian archipelago," Jonan stated, after opening the IndoEBTKE ConEx 2017 event at Balai Kartini Hall in Jakarta, on Wednesday.

Previously, the Coordinating Minister for the Ministry of Maritime Affairs, Luhut Binsar Pandjaitan, informed that Singapore has offered to supply LNG to power plants in remote areas around Sumatra and Gorontalo in Sulawesi.

Luhut noted that LNG will be channeled with facilities that can be moved to destination locations with a floating terminal, which is equipped with facilities to accommodate LNG and convert it into gas (regasification), or commonly called Floating Storage and Regasification Unit (FSRU).

"They will have investments there as they have built it," he added.

The supply is estimated to reach 500 megawatt (MW) capacity as it is reserved for remote areas.

"In total, it will be almost 500 MW. But it will be supplied in small volumes for the islands. They can be 25 MW, 50 MW, and 100 MW in Gorontalo," he remarked.

The offer from Singapore is a follow-up effort to increase energy cooperation between the two countries submitted in late April.

Meanwhile, PLN itself has informed that the state-owned electricity company (PT PLN) and Pavilion-Keppel have signed a Head of Agreement (HoA) related to logistics studies and preparation of natural gas infrastructure development or small-scale LNG.

The form of HoA is an offer to take advantage of Singapores LNG terminal as an LNG hub location considering its proximity to several gas-fired generating plant sites to be built in Sumatra.

The HoA contains activities and intensive discussions on the preparation of a more in-depth feasibility study related to LNG distribution for Tanjung Pinang and Natuna areas; preparation of the framework concept to distribute LNG owned by PLN from PLNs existing contract with Indonesian domestic sources to small-scale power plants in Tanjung Pinang and Natuna; and development of small-scale LNG infrastructure for the Tanjung Pinang and Natuna areas adjacent to Singapore.

The cooperation in the HoA is based on the principle of equality and mutual benefit of both parties, and it is carried out for six months from the signing. If the results of the study do not provide benefits for both parties for this project for six months, then the HoA does not proceed to the stages towards the agreement as regulated by the applicable regulations in Indonesia and, in particular, the procurement regulation at PT PLN.

"Therefore, this HoA is not a contract of buying and selling transaction of LNG, but it is for a preparation study of mini LNG infrastructure with the aim of obtaining the most reliable and efficient logistics solution. If it is found later, from the study results, that the cost will be higher, then the study will end without follow-up implementation," Director of PLN Amir Rosidin revealed.(*)