Indonesia's Bontang LNG plant plans switch to coal for power

Indonesia's Bontang LNG plant plans switch to coal for power

Jakarta (Platts)--5Sep2006

In a bid to save more gas for exports, Indonesia has decided to convert
the gas-fired generators powering its Bontang liquefied natural gas faciliy in
East Kalimantan into coal-fired ones, energy minister Purnomo Yusgiantoro said
Tuesday.
Converting the power plants into coal-fired units would save around 220
million cubic feet of gas daily, equivalent to 22 LNG cargoes annually,
Purnomo said. This would alleviate the LNG production shortage faced by
Indonesia due to quicker-than-expected decline in gas reserves at its East
Kalimantan fields. The country has been forced to cut its term LNG exports in
the last couple of years.
The $600-million conversion project for the 16 Bontang power units, each
of 12.5MW, is expected to be completed by 2009.
The government intends to appoint a third party to undertake the
conversion project, said Purnomo.
"If we carry out the program ourselves, it will be done only by
2010-2011. If we appoint a third party, the job can be completed by 2009,"
Purnomo said.
"We need more gas. On the other hand, we have much coal reserves. This
(switching from gas to coal) can also reduce our LNG export shortage," Purnomo
said.
East Kalimantan province is home to the country's largest coal miners
such as Katim Prima Coal and Kideco Jaya.
Meanwhile, Indonesia said in late June that its LNG customers have agreed
to reduce their contractual offtake this year by 79 cargoes, a deeper cut than
the original 55 cargoes agreed to early this year. The 79-cargo reduction will
comprise 9 cargoes from the Arun LNG plant in North Sumatra and 70 from the
Bontang plant.
Indonesia originally had a commitment to supply its LNG customers with
450 cargoes this year, of which 76 were to come from the Arun liquefaction
facility and 374 from the Bontang plant.
-- Anita Nugraha, newsdesk@platts.com
-- Anita Nugraha, newsdesk@platts.com

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