REPUBLIKA.CO.ID, JAKARTA -- State-run gas transmission and distribution company PT Perusahaan Gas Negara Tbk (PGN) has prepared for a possible increase in gas demand for power plants, amidst the soaring price of coal recently. PGN's Corporate Secretary, Rachmat Hutama, said in a statement here on Monday that the increased price of coal has opened the opportunity for power plants to use natural gas fuel.

The company has enhanced its cooperation with the state-run electricity firm PT Perusahaan Listrik Negara (PLN) to supply gas for power plants operated by its subsidiary firms, such as Indonesia Power (IP) and PT Pembangkitan Jawa Bali (PJB).

"As we know, coal price in the market has continued to soar recently. Surely, natural gas, as one fuel option for power plants, would become a solution. Therefore, we continue to encourage PLN and its subsidiaries to switch over to use natural gas, which is cheaper and cleaner for the environment," Hutama added.

Currently, PGN has supplied natural gas fuel for Tanjung Priok power plant (UPJP), operated by Indonesia Power, and Muara Karang power plant, operated by PJB.

Gas distribution for UPJP Tanjung Priok started in 2010, and the contract has been extended for some time.

PGN and PLN have signed a contract to extend gas sales and purchase agreement for UPJP Tanjung Priok, the seventh extension of contract, which took effect on Feb 1 for one-year period.

The contract would cover gas supply at 30-36 Billion British thermal unit per day (BBTUD) and interruptible gas supply at 64 BBTUD; thus, the total gas distribution from PGN would reach 100 BBTUD, or equal to the power to generate 500 Mega Watts of electricity.

"PGN is committed to maintain gas distribution until the expiry of the contract," Rahmat explained.

UPJP Priok has installed a capacity of 1,300 MW for block 1, 2, and 3, and its block 4 is planned to have an installed capacity of 740 MW. After its operation in the second half of 2018, the power plant would have a total capacity of 2,100 MW.

Currently, the gas supply for the power plant is obtained from Nusantara Regas, at 60-80 BBTUD, and PGN, at 60-90 BBTUD.

Coal price has continued to soar during the past few months, following the increased demand from China, India, and Vietnam.

Indonesia's Energy and Mineral Resource Ministry, under the ministerial decree no. 1320 K/32/MEM/2018, has set the coal reference price (HBA) for March at US$101.86 per ton, an increase of 1.16 percent compared to the February price reference at $100.69 per ton.

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