Gas shortage costs PLN up to Rp 2.4 trillion

State power firm PT PLN must carry operating costs which are Rp 2.4 trillion (US$263 million) higher than planned this year due to gas shortages affecting its Muara Tawar power plant at Bekasi, West Java.

PLN’s primary energy director Nur Pamudji said less gas supply means more oil fuel consumption.
“We must increase the power plant’s oil-based consumption by 618,000 kiloliters until the end of this year and this will cost us additional spending of Rp 2.4 trillion,” Nur Pamudji said.

PLN’s head of corporate finance division Yusuf Hamdani said the production cost of electricity generated from oil-based fuels was far higher than that generated from gas.

“In 2009, the average production cost for gas was Rp 318 per kWh [kilowatt hour], while the production cost for oil-based fuel was Rp 1,383 per kWh,”Yusuf said.

The combined cycle Muara Tawar power plant can use both diesel oil and gas. The plant receives gas from state gas distributor PT Perusahaan Gas Negara (PGN).

PGN and PLN have signed two gas sales and purchase contracts for the power plant. Under the first contract, PGN must supply as much as 200 billion British thermal units of gas per day (BBTUD) to PLN until 2012. As for the second contract, PGN has to supply 100 BBTUD to PLN for the same period. But the second contract is interruptible, meaning PGN will only supply PLN when additional gas is available.

Nur Pamudji said the gas supply had dropped to 100 BBTUD since early March, this year from an average of 250 BBTUD in 2009. “I thought the shortage was only temporary, but later on it became clear that the shortage could last until December,” Nur Pamudji said.

The Muara Tawar power plant comprises four operating units. “Currently, only one unit still receives gas,” Nur Pamudji said.

PGN’s gas supply to PLN and other industries fell this year due to a decline in the gas supply from ConocoPhillips’s South Sumatra field, PGN’s president director Hendi Prio Santoso said as quoted by Bloomberg last week.

Gas contributes 26 percent to PLN’s total energy consumption. Coal and oil-based fuels contribute 45 percent and 19 percent, respectively. The remaining 10 percent is from new and renewable energy sources such as hydro and geothermal.

PLN’s coal consumption has increased as some of the power plants planned and financed under the
first phase of the first 10,000 megawatt (MW) electricity crash program have started to come into operation.

All power plants under the first 10,000 MW project are coal-fired power plants. Nur Pamudji said PLN coal consumption reached 30 million tons this year, up from 22 million tons in 2009. However PLN coal consumption to feed an increased number of coal-fired power stations coming on stream is estimated to increase to 38 million tons in 2011.