State electricity company PT PLN, through its subholding PLN Energi Primer Indonesia (EPI), prepares power plant gasification program in support of the government’s Net Zero Emissions (NZE) target, through the development of Liquefied Natural Gas (LNG) midstream infrastructure in the Sulawesi-Maluku region.
This synergy was realized in the signing of a Joint Development Agreement (JDA) between PLN EPI and the Consortium of PT AGP Indonesia Utama (AGPIU), PT Suasa Benua Sukses (SBS) and PT KPM Oil & Gas (KPMOG) at PLN Headquarters in Jakarta on March 26, 2024. This continues a similar commitment that was previously made for the Nias and Nusa Tenggara regions.
PLN President Director Darmawan Prasodjo said that one of the strategic efforts to reduce carbon emissions towards NZE in the electricity sector is to reduce carbon emissions. The plant gasification program is a strategic step that also reduces fuel costs and dependence on imported crude oil or diesel.
“PLN already has an Accelerated Renewable Energy Development (ARED) strategy. In this energy transition scheme, PLN’s electricity will be sourced from 75 percent renewable energy plants and 25 percent from gas plants. For this reason, the role of gas is considered crucial in the energy transition era,” Darmawan said on Monday, April 1, 2024.
Darmawan added, with this cooperation, PLN strengthens strategic collaboration with gas infrastructure providers to ensure gas supply for power plants. Because with a strong primary energy supply, it can guarantee a reliable electricity supply.
PLN Legal & Human Capital Director Yusuf Didi Setiarto said the signing of the cooperation between PLN EPI and consortium partners was an important stage in the development of primary energy in Indonesia.
“We should be happy that we have gradually found a solution to the development of the LNG supply chain through the signing of this cooperation. All parties must consolidate to map out the next stages so that this program can be implemented well,” Yusuf said.
PLN EPI President Director Iwan Agung Firstantara revealed that PLN EPI was formed to ensure the availability of primary energy supplies by simplifying procurement and logistics processes, providing primary energy supplies, and building a strong supply chain. This includes offering environmentally friendly primary energy to support the NZE and ARED strategies that have been launched by the PLN group.
“With PLN’s commitment to gas-fired power plants, PLN EPI needs to accelerate the development of LNG midstream infrastructure for gasification of power plants, including in the Sulawesi-Maluku region,” Iwan said.
He cited that the existence of pipeline gas networks and LNG terminals is almost entirely located in the western part of Indonesia. To support the gas supply chain, PLN EPI and selected partners will develop midstream LNG infrastructure in Indonesia, including in Sulawesi and Maluku.
Iwan said that the AGP-SBS-KPMOG consortium has been appointed as a partner for regasification development in 7 locations in the Sulawesi and Maluku regions with an overall capacity of 1,510 megawatts (MW).
AG&P LNG CEO and AGPIU Commissioner Karthik Sathyamoorthy appreciated the collaboration with PLN EPI. Karthik emphasized that his company is strongly committed to supporting efforts to develop midstream LNG infrastructure in Indonesia through long-term cooperation with PLN EPI.
“We will work hard to jointly implement the project within the set deadline. This is the first stage of a long-term cooperation for the next 20 years,” Karthik said.
Karthik added that the LNG midstream infrastructure development project with a cluster scheme has attracted the attention of the world’s LNG industry players due to the complexity of the project, especially in terms of location and supply chain as a unit, which makes the first cluster model LNG development project in the world.
However, this challenge will be one of the impetus for the consortium to focus on the project while supporting PLN Group’s decarbonization efforts.
“We are confident that our solution will unlock other potentials in the development of the Sulawesi-Maluku cluster. At the same time, it will help PLN in achieving an important stage of decarbonization of the power generation sector,” Karthik said.
