Home » Andalas Energy and Power (ADL) » Revolving blackouts loom as power shortages worsen across Indonesia – Jakarta Post

Revolving blackouts loom as power shortages worsen across Indonesia – Jakarta Post

CEB ResourcesOn September 2nd 2015, CEB Resources updated the market, saying it had agreed with PT Akar Golindo (PTAG) to assess the technical and commercial opportunities for monetising gas in and around the Tuba Obi East oil and gas concession in the South Sumatran Basin. The studies investigated both the potential to sell the gas directly to the Singapore market, the Duri steam-flood project, or other buyers via the major transmission gas pipeline, about 12 kilometres away.  Alternatively there is the opportunity to monetise the gas via the construction and operation of an independent power plant, selling electricity into the Sumatran power grid.

CEB sees the gas and power market in Indonesia as an opportunity that should form part of its long-term balanced asset portfolio.  Importantly the gas price is independent of the oil price. This was demonstrated in January this year when a Sumatran gas project secured a long-term gas sales contract at US$ 9.45 per Million British Thermal Units (MMBTU), which is amongst the highest gas prices in the world.  Similarly, the demand for electricity continues to rise sharply with the country’s electricity provider PLN setting the ambitious goal of increasing supply by some 35,000 MW over the next 4 years.  With only 9,000 MW having been firmed up thus far, CEB believes that investment in this sector is particularly attractive.

Yesterday an article was published in the Jakarta Post warning that revolving blackouts are likely given the power shortages that exist – again highlighting the market potential. Alihuddin Sitompul, director at the Energy & Mineral Resources directorate general for Electricity said, “We are currently pushing our power plants to the limits of their operation in order to catch up with growing demand.” He added, “We have to rest some of the plants, yet that simply means supply will become a nagging concern.”

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