PLN President Director Dahlan Iskan said following the signing of a sales purchase agreement here on Tuesday the gas was priced at US$4.79 per million British thermal unit (MMBTU) with an escalation of three percent for every three years.
"The gas will be supplied as of June 2013 until 2033," he said.
The gas supplies would come from the Bangkanai field in Muara Teweh district, Central Kalimantan, operated by Salamander Energy Limited, he said.
The gas would come in the form of compressed natural gas (CNG) to be used during the period of peak load power consumption between 05.00 to 10.00 p.m, he said.
He said the gas would be supplied to a gas-fueled power plant which would meet power needs in South Kalimantan, Central Kalimantan and East Kalimantan.
The use of gas from the Bangkanai field would allow PLN to lower its fuel expense by Rp1 trillion per year on assumption diesel oil was priced at Rp8,500 per liter and the rupiah`s exchange rate against the US greenback was Rp8,600 per dollar, he said.
"This means that electricity subsidy can be kept down by that amount," he said.
Besides the gas-fueled power plant, PLN was also in the process of building a thermal power plant in the area expected to start operating in 2013. (*)
Editor: Kunto Wibisono
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