Jakarta – Gas distribution company PT Perusahaan Gas Negara (PGN), part of state-owned oil and gas holding company Pertamina, will spend about US$2.5 billion on the construction of liquefied natural gas (LNG) receiving terminals and gas distribution facilities to support the gasification program of state-owned electricity company PLN, an executive of the company has said.
As required by Pertamina, PGN would build LNG receiving terminals and their distribution facilities to meet the gas needs of PLN's power plants in a number of locations in the country, PGN corporate secretary Rachmat Hutama said in a statement issued in Jakarta on Sunday.
"PGN has developed a small scale LNG terminal that can be used to supply electricity to PLN's power plants," Rachmat said as reported by kompas.com.
LNG receiving terminals and gas distribution facilities will be built in regions such as Nusa Tenggara, West Kalimantan, North Papua, Sulawesi and Maluku.
The government has ordered PLN to use natural gas in some of its power plants in order to reduce Indonesia's oil imports and to increase usage of cleaner fuel sources.
The Energy and Mineral Resources Ministry issued a decree dated Jan. 10 ordering PLN to use LNG in its 52 diesel power plants that will be later modified to enable them to use gas.
PLN president director Zulkifli Zaini said on Jan. 28 that the program would reduce the company's diesel consumption from 2.6 million kiloliters (kL) last year to 1.6 million kL "with estimated operational cost savings at Rp 4 trillion (US$293.9 million)." The company has two years to execute the program. (hen)