(Updates with PLN comments in third paragraph.)
Nov. 4 (Bloomberg) -- Indonesia’s state-owned power company PT Perusahaan Listrik Negara signed an agreement to buy coal-bed methane gas from a joint venture of BP Plc and Italy’s Eni SpA, Indonesia’s oil and gas regulator BPMigas said.
Listrik Negara will buy 500,000 cubic feet a day of coal- bed methane from VICO Indonesia, run by BP and Eni, for at least five years, Priyono, the BPMigas chairman of BPMigas, said today in Jakarta at the signing ceremony. The gas will be used to generate electricity at PLN’s 3-megawatt power plant in East Kalimantan, Nur Pamudji, the company’s president director, told reporters at the presentation.
“We expect the coal-bed methane gas can be supplied starting December this year,” said Pamudji. The company expects to complete the supply agreement with VICO by end of this month, he added.
Indonesia has an estimated 453 trillion cubic feet of coal- bed methane resources, R. Sukhyar, the head of geology at the energy ministry said in an interview on May 26. The government plans to boost natural gas supply by developing shale gas and coal-bed methane to meet increased domestic demand for the fuel.
“This memorandum of understanding marks the use of CBM gas for electricity generation for the first time in Indonesia,” Priyono said. The gas will be sourced from VICO’s Sanga-Sanga coal-bed block in East Kalimantan, said BPMigas.
--Editors: Christian Schmollinger, Mike Anderson
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