Marubeni Inks Indonesia Gas to Power Deal

Japan's Marubeni and Sojitz together with Indonesia's state Pertamina are to develop a power plant, floating LNG import terminal and associated facilities that will sell electricity to Indonesia state owned utility PLN.

The project will be developed by a special purpose company (SPC) called Jawa Satu Power, owned by Pertamina and the two Japanese firms, and will be located at Cilamaya in West Java province.

The SPC has entered into a long-term power purchase agreement to sell electricity to PLN for 25 years and to operate a 1,760MW gas-fired power plant and a floating storage and regasification unit (FSRU), Marubeni said January 31. The overall cost of the project is expected to be $1.8bn. 

The 1.76 GW power plant and FSRU will be located at Cilamaya in West Java province (Map credit: Marubeni)

Pertamina and Marubeni each hold a 40% stake in the joint company while Sojitz owns the remaining 20%.

Similar to other southeast Asian nations like Thailand and Philippines, power demand in Indonesia too is increasing rapidly. The Indonesian government has set a target to provide an additional 35GW of power capacity by 2019. This is expected to boost demand for gas as gas based power plants are gaining popularity.

“As a new challenge, we will continue to develop 'Gas-to-Power' projects such as this project, which include the energy chain of LNG storage and regasification to the production of electricity using the same gas,” Marubeni said, adding that it was "the first project of its kind in Indonesia."

Shardul Sharma