Jakarta, March 16 (Antara) - State-owned gas distributor company PGN is gaining momentum to increase its sales following the upward trend in coal prices which have exceeded US$100 per tonne.
According to PGN Corporate Secretary Rachmat Hutama, the gas product of the company could become an alternative to coal consumers such as power generators following the increase in the coal prices. As a result, PGN is ready to meet the increasing demand for gas supplies from power plants amid the rising prices.
Coal prices have continued to rise in recent months with high demand across Asian nations such as China, India and Vietnam. In the face of increasing prices, the government has also raised its coal benchmark price (HBA).
According to data from the Energy and Mineral Resources Ministry on Thursday (March 8), the HBA for coal was set at $101.86 per tonne for March, 2018. It is an increase of 1.16 percent from $100.69 per tonne in February.
The rise in coal prices could lead power companies to switch to natural gas. PGN is currently continuing to work with state-owned electricity firm PLN to meet the gas supply needs for power plants.
"As we know, the price of coal in the market has continued to rise sharply in recent times. Of course, natural gas for power generation will be an attractive solution. Therefore, we continue to encourage PLN and its subsidiaries to switch to cheaper gas which is cleaner for the environment," Hutama noted.
Currently, PGN supplies gas to PLN plants such as Tanjung Priok and Muara Karang. In Tanjung Priok, North Jakarta, the PGN gas distribution network has been operational since early 2010.
PGN and PLN have signed gas distribution contracts where PGN is to distribute gas to Priok at a volume of 30-36 BBTUD (Billion British Thermal Unit per Day) and interruptible 64 BBTUD, bringing a total of 100 BBTUD, which is the equivalent of 500 MW in power generation.
"PGN is committed to maintaining the continuity of gas distribution after the expiration of the contract," Hutama said.
In June 2017, PGN improved the gas distribution infrastructure at Priok by increasing gas pressure to provide efficiency of generation. The capacity of the Priok power plant is installed at around 1,300 megawatts (MW) for Blocks 1, 2 and 3) and there are plans to install around 740 MW for Block 4 which is expected to operate in the second half of 2018, bringing the total to 2,100 MW.
Priok's gas supply comes from Nusantara Regas with a volume 60-80 BBTUD and PGN comes in at 60-90 BBTUD.
For Muara Karang, PGN and PLN signed a one year gas sale and purchase contract in February 2018 for a volume of five BBTUD and an interruptible 55 BBTUD or equivalent to 280 MW.
Currently, the installed capacity of Muara Karang is about 1,700 MW and there are further plans to install a capacity of 500 MW which is expected to be operational in 2020, bringing the total to 2,200 MW.
Muara Karang's gas supply is obtained from Nusantara Regas with a volume of 100-150 BBTUD and from PT Pertamina Hulu Energi (PHE) with a volume of 30-60 BBTUD.
For gas distribution to Muara Karang, PGN is currently developing the infrastructure, which will be completed in early 2018. With the introduction of PGN gas into Muara Karang, it is expected to provide a more reliable supply of fuel in Muara Karang.
Hutama remarked Monday (March 12) that the increased coal price has enabled them to enhance cooperation with PLN to supply gas for its subsidiary power plants operated by firms such as Indonesia Power (IP) and PT Pembangkitan Jawa Bali (PJB).
PGN posted a net profit of US$143.1 million (Rp1.92 trillion) last year. The company also saw its income increase to $2.97 billion in the same year, from $2.93 billion a year earlier, according to a report made available to Antara.
The income was generated by gas sales worth $2.4 billion and oil and gas sales worth $472.8 million. In 2017, the company recorded an operating profit of $377.01 million, while its earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by $23 million from a year ago, to $830 million.
Throughout 2017, PGN distributed 855.5 BBUTD of natural gas, comprising a distribution volume of 771.55 BBTUD, and gas transmission volume of 83.95 BBTUD.
In line with the government's efforts to boost the national economy, PGN is optimistic its performance will get even better. This year, PGN will continue to develop its natural gas infrastructure to further expand the use of gas. ***3*** (A014/INE)
EDITED BY INE/B003(T.A014/A/BESSR/Bustanuddin) 17-03-2018 00:10: |
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