Andalas Energy and Power plc (AIM:ADL) is pleased to announce that it has signed a memorandum of understanding with PT Pertamina Power Indonesia, a wholly-owned subsidiary of PT Pertamina (Persero), and Siemens AG regarding the development of an independent power producer at the Puspa field in Sumatra.
- Andalas, PPI and Siemens agree to jointly pursue the development of an independent power producer at the Puspa field in Sumatra. The Puspa field is operated by PT Pertamina EP.
- Establishes the basis to:
- engage project partners;
- negotiate and agree further project agreements with all stakeholders;
- secure gas from the Puspa field;
- generate conceptual development plans including an electricity demand analysis, a load flow study, a site identification study, identify and select gas fired power generation technology, and identify and select an engineering, procurement and construction contractor.
- The parties have agreed to bear their own costs and to share all agreed third party costs, equally during this phase of the project. The agreement includes binding provisions relating to the joint pursuit of the project, conditions precedent, exclusivity, costs, term and confidentiality and non-binding provisions relating to the objectives and execution of further agreements and joint committees. It is for a term of 24 months and subject to all necessary approvals and finance.
- The Company will make a final investment decision after the project has been included in the RUPTL and the Company has completed the work program outlined above, obtained various licences relating to the facility and transmission lines and negotiated the final agreements with other stakeholders including the consortium members, PEP, PLN and lending institutions.
- The third party costs to Andalas during the development phase are expected to be modest. The material costs of the project relate to the capital costs of the power plant, which will only be incurred when the project achieves FID.
David Whitby, CEO of Andalas Energy & Power, commented, “The execution of the Puspa MOU establishes our first joint project with PPI and Siemens.
“Pertamina has recently completed an appraisal program on the Puspa field. The proposed IPP would enable Pertamina to commercialise the field. Andalas’ preliminary assessment is that it will support a 20 to 50MW wellhead IPP. We will continue to refine this model in discussions with all stakeholders including PPI, Siemens, PEP and PLN.
“We are pleased to welcome Siemens to our consortium. Siemens is a leading provider of generating systems and networks in Indonesia and we believe their addition to the project will prove invaluable.”
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (‘MAR’). Upon the publication of this announcement via a Regulatory Information Service (‘RIS’), this inside information is now considered to be in the public domain.
For further information, please contact:
|David Whitby||Andalas Energy and Power Plc||Tel: +62 21 2783 2316|
|Sarah Wharry||Cantor Fitzgerald Europe
(Nominated Adviser and Joint Broker)
|Tel: +44 20 7894 7000|
|Jon Belliss||Beaufort Securities Limited
|Tel: +44 20 7382 8415|
|St Brides Partners Limited||Tel: +44 20 7236 1177|
Notes for Editors:
PT Pertamina (Persero) (“Pertamina”) – Indonesia’s National Oil Company
Today Pertamina is ranked 230 on the Global Fortune 500 of companies generating over US$41 billion in revenue and with some US$45.5 billion in assets in 2015. It has interests in over 230,000 square kilometres of acreage, has over 5 billion barrels of oil equivalent (‘boe’) in proven and probable reserves, and in 1H 2016 its production reached 640,000 boe per day, equating to over 50% of Indonesia’s total hydrocarbon production. Pertamina’s business is fully integrated and includes a significant power business. Pertamina are the lead developer of the recently approved Jawa-1 (1,760MW) power plant and have a further 235 MW of geothermal power plants in operation or being commissioned throughout Indonesia.
PT Pertamina Power Indonesia (“PPI”) – Pertamina’s power developer
PPI was recently established by Pertamina to run, control and manage all of its power business activities in Indonesia and globally. From 2017, all gas-based and new & renewable energy power projects undertaken by the Pertamina Group will be officially led by PPI. PPI’s interests include a stake in PT Jawa Satu Power which is developing the 1760 MW Jawa-1 IPP. PPI also has stakes in a number of solar power projects.
PT PLN (Persero) – Indonesia’s National Utility
PLN is a state-owned company responsible for the majority of Indonesia’s power generation. It has exclusive powers over the transmission, distribution and supply of electricity to the public and it is responsible for the procurement of independent power production. PLN employs circa 51,000 employees across the archipelago and PLN’s total generating capacity (produced by many different plants across Indonesia) at 31 December 2015 was reported at around 40,265MW. PLN is focusing their efforts and investments to fulfilling the Governments ambitious targets of adding 35,000 MW of generating capacity by 2019 in order to increase the electrification ratio of Indonesia to levels comparable with other ASEAN nations.
Siemens AG is a German conglomerate company headquartered in Berlin and Munich and one of the largest global industrial manufacturing companies. Siemens is 50% owner of PT Jawa Power 1,220MW that is the only coal fired power plant to receive the Proper Gold award from the government of Indonesia.
The RUPTL or Rencana Usaha Penyediaan Tenaga Listrik is Indonesia’s electricity business plan. It contains demand forecasts, future expansion plans, electricity production forecasts, fuel requirements and indicates which projects are planned to be developed by PLN and independent power project investors.