PLN-Kalila Gas Piping Contract Renewed

Pekanbaru, Riau, Sept 1 (ANTARA) - The gas supply contract between the States Electric Company, PT PLN and PT Kalila Energy is renewed due to the high land acquisition price on the area, a spokesman said.

"PLN executive director, Dahlan Iskhan had approved the contract renewal," said spokesperson for upstream oil and gas regulator BP Migas, Elan Biantoro, here Wednesday.

Since 2005, Kalila Energy is under a Gas Sale Agreement contract with PT PLN in supplying 30 Million Metric Standard Cubic Feet per Day (MMSCFD) for Teluk Lembu Power Plant in Pekanbaru.

The gas supply will enhance Teluk Lembu's Plant capacity from 40-50 megawatt (MW) to 100 MW which initially to be transported in a 50 kilometers long pipe line from Segat field Pelalawan district to Pekanbaru.

Instead of building a 50 kilometer long piping line, BP Migas recommended that to build a power plant near the well head where the electricity would be distributed by a high voltage cables network, he said.

The plant building on well head is considered more economic than acquisition of public land for gas piping.

Kalila Energy Public Relation head Dahrul Hidayat said that the piping land prices hikes in the acquisition negotiation process.

"We estimated that the 50 kilometers long land acquisition would reach Rp.500 billion, not to mention the number of panders in the process," he said.

The high land price also hampered PLN and Kalila Energy's piping project supposed to be started several moments ago.