Indonesian state-owned gas company PT Perusahaan Gas Negara (PGN) is to develop three domestic LNG hubs to supply the country’s power stations.
According to the Jakarta Post, PGN will spend US$2.5 billion (€2.2 billion) to develop its LNG terminal in Arun, Aceh into a regional gas distribution hub, develop a floating storage and regasification unit (FSRU) in Lampung, Sumatra, and build a new terminal in Ambon, Maluku, in order to serve western, central and eastern Indonesia. PGN told the Jakarta Post that the development plan includes pipelines, ships, trucks and supporting facilities.
The Indonesian government wants to cut oil imports as part of efforts to cut greenhouse gas emissions. The three new hubs will supply gas to 52 power stations. At present, the power stations are running on diesel, which is more readily available, but the new hubs will allow them to switch to cleaner-burning gas more easily. PGN is working with PT Perusahaan Listrik Negara (PLN), the state-run energy firm, to convert the 52 plants to run on gas. Switching to gas is also expected to save fuel costs of up to US$277 million.