Andalas, Indonesian Pertamina Complete Gas to Power Feasibility Study
Andalas Energy and Power and Indonesian Pertamina have completed a feasibility study for its first 60-MW wellhead gas-to-power project in the Jambi province of Sumatra. The project was selected under the agreement signed to identify at least five stranded gas fields within Pertamina’s acreage in Riau, Jambi and South Sumatra provinces.
Andalas' strategy is to develop a portfolio of at least five wellhead independent power producer (wellhead IPP) projects totalling 250-500 MW of installed capacity fired with gas from proven fields, the company said February 27.
Results of the feasibility study by PLN Enjinering, a division of state electricity company PLN, confirm the project's viability. It says that construction could start by 4Q 2017 with completion by end 4Q 2018. Power produced can be efficiently connected to the PLN system and can be absorbed by the Sumatra power network without any operational problems. The study results suggest that gas supply is sufficient for 20-years of powergeneration.
Andalas CEO David Whitby said "The recently announced new regulations have elevated wellhead IPPs to a priority level within the government's 35-GW programme. The government's new regulation governing wellhead IPPs is exactly aligned with Andalas' gas-to-power strategy and I look forward to informing shareholders as we progress our first project through to approval.”
The government on February 2 issued new regulations pertaining to power projects. Three new regulations issued by the ministry of energy and minerals classify integrated gas to power projects, such as Andalas' first project, as critical to the government's 35-GW programme. Also, PLN has confirmed that independent power projects located at the wellhead (wellhead IPP) are priority projects and that Andalas' 60-MW wellhead IPP project is expected to be the first to be evaluated by PLN under the new regulations.
Andalas is working with Pertamina to build portfolio of gas to power projects. The two parties will identify the location of gas supply for the next wellhead IPP projects. Andalas is targeting the initiation of a further four new projects during the course of 2017 as it seeks to build towards its target of 500 MW, the company said.
Shardul Sharma