COALspot.com keeps you connected across the coal world
  • NOVEMBER 2021 HBA FOR EXPORTS INCREASED BY $33.03% MOM, $85.79 YTM AND $183.50% YOY
  • NOVEMBER 2021 INDONESIAN COAL PRICE REFERENCE FOR EXPORTS FIXED AT US$215.01 A TON

Submit Your Articles
We welcome article submissions from experts in the areas of coal, mining, shipping, etc.

To Submit your article please click here.

International Energy Events


WTI Crude Oil

BRENT Crude Oil

Search News
Latest CoalNews Headlines
Friday, 27 August 21
THE ECONOMICS OF INDONESIA’S DIESEL POWER PLANT TO GAS CONVERSION PLAN ARE PROBLEMATIC - IEEFA
IEEFADeploying new small-scale LNG is an uphill battle for PGN

Indonesian gas is currently in a precarious position, where the government needs to find new domestic demand to absorb surplus gas coming into the market amidst expiring export contracts. According to the Institute for Energy Economics and Financial Analysis’ (IEEFA) new report, small-scale liquefied natural gas (ssLNG) has been re-proposed in Indonesia to create new market demand and to expand gas use in the power sector by replacing high-cost fuel oil. However, the economics of this gas conversion plan are problematic.
 
According to the report’s author, IEEFA energy analyst Putra Adhiguna, the Indonesian government has tasked Pertamina, and by extension, Perusahaan Gas Negara (PGN), to deliver gas to 52 PT Perusahaan Listrik Negara (PLN) power plants at a lower equivalent price than fuel oil.
 
ssLNG is a niche segment of the gas industry, which involves a scaled-down version of LNG operations, transporting less than 0.5 million metric tonnes of LNG per year.
 
“PGN estimated an investment of US$1.5bn to US$2.5bn will be required to deliver 167 Billion British Thermal Unit per Day (BBTUD) of gas to these 52 plants, with half of them using less than 2 BBTUD,” says Adhiguna.
 
The plan has been a decade in the making. PLN, which previously took the lead in the ssLNG supply chain establishment, has now moved to the receiving end, shifting nearly all the risk to PGN.
 
The current gas conversion plan would clearly benefit PLN if the gas could indeed be delivered cheaply to its plants.
 
“What is less clear is whether PGN, a State-Owned Enterprise (SOE) subsidiary with a sizeable public ownership can survive this arrangement. Supply chain cost of LNG is known to be costly, and even more so at a smaller scale,” says Adhiguna.
 
“The rising urgency for the government to build gas demand is evident in the new gas pricing policy, which cut the government’s revenue share from gas production to suppress the downstream gas price. The potential loss in state revenue was claimed to be offset by savings on subsidies and an increase in economic activities, including IDR 13 trillion in savings from the gas conversion plan.”
 
A year on, little progress has been made.
 
“As a major local gas distributor, PGN is already under stress due to the impacts of COVID-19 and the new gas pricing policy. With its distribution margin expected to decline from $2.2-2.5 to $1.8-2.00/Million BTU, the alarm bells are already ringing,” says Adhiguna.
 
“Competing priorities with other projects is tight. In 2020, PGN allocated less than US$14 million for the conversion project out of the company’s US$300 million capex. Its 2021 capex plan also does not align with the two-year conversion deadline mandated by the government.”
 
While PGN has repeatedly stated that it is ‘ready’ for the gas conversion project, the company has not yet disclosed how the investment will be scaled in the coming years and its impact on the company’s financials. With approximately US$2bn of debt maturing in 2024, the company needs to ensure its financials remain stable to service the debt.
 
So far, there has been little mention on how government support for PGN will be given.
 
The economics of ssLNG for PGN will be stress-tested by investors. With existing total assets of US$7.5bn, transmission volumes of more than 1,250 BBTUD, and 820 BBTUD of distribution volumes in 2020, PGN investors will be cautious about the merits of a US$1.5bn investment that will only result in 167BBTUD of additional delivery capacity.
 
“There is a reason why ssLNG has been on the drawing board for such a long time, justifying its economics is a big challenge,” says Adhiguna.
 
“The capital needed per unit of delivered capacity is more than two to four times the investment required for existing conventional-scale LNG projects.
 
“ssLNG loses the edge on economies of scale. The cost for conventional LNG supply chains typically accounts for 10-20% of the total gas price, while the planned ssLNG supply chain potentially costs 30-50% of the gas price.”
 
In an industry that emphasizes capital discipline, investors will pay close attention to PGN’s past LNG investments, such as the low utilization of FSRU Lampung, while remaining mindful of the inconsistent history of PLN gas demand.
 
It’s very clear that Indonesia faces a two-fold challenge to build a gas market as soon as possible, while simultaneously managing a rapid gas production decline risk in the coming decades. Other policy decisions have dictated the need to create more demand for domestic gas, but it will be crucial to get the economics right, as sudden policy manoeuvres can reverse investment fundamentals in a heartbeat.
 
PGN would be wise to tread carefully, as many are watching closely.


If you believe an article violates your rights or the rights of others, please contact us.

Recent News

Friday, 26 November 21
AS COAL MARKET STABILIZES, CHINA STEPS UP NATURAL GAS SUPPLY TO MEET WINTER DEMAND - GLOBAL TIMES
The daily supply of natural gas in China has exceeded 1 billion cubic meters (bcm) since November began, up 11 percent year-on-year, data from stat ...


Friday, 26 November 21
CHINA FINDS COMPLIANCE PROBLEMS IN COAL PRICE INDEX PROBE - REUTERS
China’s state planner on Wednesday said it had discovered some “noncompliant” behaviour among coal price index providers as it an ...


Thursday, 25 November 21
SE ASIA POWER DEMAND TO RISE AS STATE SUPPORT MITIGATES COVID-19 IMPACT - FITCH RATINGS
Electricity demand in south-east Asia is likely to increase in 2021, following slow growth or contraction in 2020, thanks to state support that has ...


Thursday, 25 November 21
FITCH RATINGS INCREASES MOST GLOBAL METALS AND MINING PRICE ASSUMPTIONS - FITCH RATINGS
Fitch Ratings has increased most metals and mining price assumptions, particularly those that benefit from increased longer-term demand due to glob ...


Thursday, 25 November 21
CHINA'S COAL PRICE DROPS IN MID-NOVEMBER AMID GOVERNMENT’S SWEEPING MEASURES - GLOBAL TIMES
China’s coal prices have dropped significantly in mid-November compared with the beginning of the month, with the price of coking coal and co ...


   1 2 3 4 5   
Showing 1 to 5 news of total 6470
News by Category
Popular News
 
Total Members : 27,644
Member
Panelist
User ID
Password
Remember Me
By logging on you accept our TERMS OF USE.
Free
Register
Forgot Password
 
Our Members Are From ...

  • globalCOAL - UK
  • Gujarat Electricity Regulatory Commission - India
  • PetroVietnam
  • Ministry of Transport, Egypt
  • GB Group - China
  • Cigading International Bulk Terminal - Indonesia
  • Directorate General of MIneral and Coal - Indonesia
  • Maharashtra Electricity Regulatory Commission - India
  • JPower - Japan
  • Directorate Of Revenue Intelligence - India
  • Cement Manufacturers Association - India
  • Bukit Makmur.PT - Indonesia
  • Iligan Light & Power Inc, Philippines
  • Total Coal South Africa
  • Indian School of Mines
  • Surastha Cement
  • Bayan Resources Tbk. - Indonesia
  • Star Paper Mills Limited - India
  • J M Baxi & Co - India
  • Altura Mining Limited, Indonesia
  • Enel Italy
  • PTC India Limited - India
  • Chettinad Cement Corporation Ltd - India
  • Vale Mozambique
  • Port Waratah Coal Services - Australia
  • KOWEPO - South Korea
  • Siam City Cement - Thailand
  • Lanco Infratech Ltd - India
  • Coal Orbis AG
  • LBH Netherlands Bv - Netherlands
  • SMG Consultants - Indonesia
  • BRS Brokers - Singapore
  • Ernst & Young Pvt. Ltd.
  • APGENCO India
  • Mintek Dendrill Indonesia
  • Merrill Lynch Commodities Europe
  • Karbindo Abesyapradhi - Indoneisa
  • Filglen & Citicon Mining (HK) Ltd - Hong Kong
  • India Bulls Power Limited - India
  • Sucofindo - Indonesia
  • SGS (Thailand) Limited
  • Asmin Koalindo Tuhup - Indonesia
  • Noble Europe Ltd - UK
  • Maruti Cements - India
  • PetroVietnam Power Coal Import and Supply Company
  • Vitol - Bahrain
  • Goldman Sachs - Singapore
  • Asian Development Bank
  • Sindya Power Generating Company Private Ltd
  • Medco Energi Mining Internasional
  • Gupta Coal India Ltd
  • SRK Consulting
  • HSBC - Hong Kong
  • Infraline Energy - India
  • Coal and Oil Company - UAE
  • Berau Coal - Indonesia
  • The State Trading Corporation of India Ltd
  • Australian Commodity Traders Exchange
  • Kumho Petrochemical, South Korea
  • PLN Batubara - Indonesia
  • Clarksons - UK
  • McKinsey & Co - India
  • Pipit Mutiara Jaya. PT, Indonesia
  • Kepco SPC Power Corporation, Philippines
  • Planning Commission, India
  • Tamil Nadu electricity Board
  • JPMorgan - India
  • Xstrata Coal
  • Banpu Public Company Limited - Thailand
  • Uttam Galva Steels Limited - India
  • Rashtriya Ispat Nigam Limited - India
  • Coalindo Energy - Indonesia
  • TRAFIGURA, South Korea
  • Meenaskhi Energy Private Limited - India
  • ANZ Bank - Australia
  • Platou - Singapore
  • VISA Power Limited - India
  • Britmindo - Indonesia
  • Merrill Lynch Bank
  • Semirara Mining and Power Corporation, Philippines
  • IBC Asia (S) Pte Ltd
  • U S Energy Resources
  • Indorama - Singapore
  • Jindal Steel & Power Ltd - India
  • Kohat Cement Company Ltd. - Pakistan
  • Africa Commodities Group - South Africa
  • Malco - India
  • Wood Mackenzie - Singapore
  • Thai Mozambique Logistica
  • Antam Resourcindo - Indonesia
  • Romanian Commodities Exchange
  • Global Business Power Corporation, Philippines
  • Core Mineral Indonesia
  • Bhatia International Limited - India
  • Cosco
  • MEC Coal - Indonesia
  • Straits Asia Resources Limited - Singapore
  • Videocon Industries ltd - India
  • Australian Coal Association
  • Price Waterhouse Coopers - Russia
  • Adani Power Ltd - India
  • Vizag Seaport Private Limited - India
  • Kapuas Tunggal Persada - Indonesia
  • PLN - Indonesia
  • Gujarat Sidhee Cement - India
  • Shree Cement - India
  • Georgia Ports Authority, United States
  • Meralco Power Generation, Philippines
  • Arutmin Indonesia
  • Siam City Cement PLC, Thailand
  • Madhucon Powers Ltd - India
  • Alfred C Toepfer International GmbH - Germany
  • OCBC - Singapore
  • ING Bank NV - Singapore
  • Jatenergy - Australia
  • Thermax Limited - India
  • Interocean Group of Companies - India
  • Oldendorff Carriers - Singapore
  • Electricity Generating Authority of Thailand
  • Adaro Indonesia
  • KPMG - USA
  • Dalmia Cement Bharat India
  • CNBM International Corporation - China
  • SN Aboitiz Power Inc, Philippines
  • European Bulk Services B.V. - Netherlands
  • Energy Development Corp, Philippines
  • TANGEDCO India
  • Maersk Broker
  • World Bank
  • Samtan Co., Ltd - South Korea
  • Cebu Energy, Philippines
  • Power Finance Corporation Ltd., India
  • IHS Mccloskey Coal Group - USA
  • Borneo Indobara - Indonesia
  • Vedanta Resources Plc - India
  • Bukit Asam (Persero) Tbk - Indonesia
  • SMC Global Power, Philippines
  • Coaltrans Conferences
  • PNOC Exploration Corporation - Philippines
  • Central Electricity Authority - India
  • Petrochimia International Co. Ltd.- Taiwan
  • Karaikal Port Pvt Ltd - India
  • EMO - The Netherlands
  • Orica Australia Pty. Ltd.
  • Geoservices-GeoAssay Lab
  • Minerals Council of Australia
  • AsiaOL BioFuels Corp., Philippines
  • Kartika Selabumi Mining - Indonesia
  • Panama Canal Authority
  • Ambuja Cements Ltd - India
  • Binh Thuan Hamico - Vietnam
  • Global Coal Blending Company Limited - Australia
  • Latin American Coal - Colombia
  • Billiton Holdings Pty Ltd - Australia
  • NALCO India
  • Fearnleys - India
  • Offshore Bulk Terminal Pte Ltd, Singapore
  • Freeport Indonesia
  • Parry Sugars Refinery, India
  • SASOL - South Africa
  • Gresik Semen - Indonesia
  • Tata Chemicals Ltd - India
  • Indonesia Power. PT
  • Aboitiz Power Corporation - Philippines
  • TNPL - India
  • Mjunction Services Limited - India
  • Singapore Mercantile Exchange
  • Pendopo Energi Batubara - Indonesia
  • Runge Indonesia
  • GAC Shipping (India) Pvt Ltd
  • Credit Suisse - India
  • Posco Energy - South Korea
  • Bank of China, Malaysia
  • Coastal Gujarat Power Limited - India
  • CCIC - Indonesia
  • White Energy Company Limited
  • Mitra SK Pvt Ltd - India
  • Tata Power - India
  • Japan Coal Energy Center
  • Energy Link Ltd, New Zealand
  • Ministry of Mines - Canada
  • TGV SRAAC LIMITED, India
  • Kobe Steel Ltd - Japan
  • Krishnapatnam Port Company Ltd. - India
  • Deloitte Consulting - India
  • Bhushan Steel Limited - India
  • International Coal Ventures Pvt Ltd - India
  • Mechel - Russia
  • Lafarge - France
  • Essar Steel Hazira Ltd - India
  • Wilmar Investment Holdings
  • Humpuss - Indonesia
  • ICICI Bank Limited - India
  • Dr Ramakrishna Prasad Power Pvt Ltd - India
  • Rio Tinto Coal - Australia
  • Bharathi Cement Corporation - India
  • The University of Queensland
  • Therma Luzon, Inc, Philippines
  • Formosa Plastics Group - Taiwan
  • KEPCO - South Korea
  • Simpson Spence & Young - Indonesia
  • Bukit Baiduri Energy - Indonesia
  • Sical Logistics Limited - India
  • Moodys - Singapore
  • Pinang Coal Indonesia
  • Tanito Harum - Indonesia
  • Indogreen Group - Indonesia
  • Sinarmas Energy and Mining - Indonesia
  • IEA Clean Coal Centre - UK
  • Inspectorate - India
  • BNP Paribas - Singapore
  • Xindia Steels Limited - India
  • Reliance Power - India
  • Cardiff University - UK
  • Thriveni
  • UBS Singapore
  • Bank of Tokyo Mitsubishi UFJ Ltd
  • New Zealand Coal & Carbon
  • Asia Cement - Taiwan
  • Agrawal Coal Company - India
  • Eastern Coal Council - USA
  • Thiess Contractors Indonesia
  • IMC Shipping - Singapore
  • Edison Trading Spa - Italy
  • Economic Council, Georgia
  • Orica Mining Services - Indonesia
  • Kaltim Prima Coal - Indonesia
  • Bhoruka Overseas - Indonesia
  • Permata Bank - Indonesia
  • Kalimantan Lumbung Energi - Indonesia
  • OPG Power Generation Pvt Ltd - India
  • Cemex - Philippines
  • Petron Corporation, Philippines
  • Trasteel International SA, Italy
  • Kobexindo Tractors - Indoneisa
  • Standard Chartered Bank - UAE
  • Glencore India Pvt. Ltd
  • Bulk Trading Sa - Switzerland
  • Arch Coal - USA
  • Attock Cement Pakistan Limited
  • GN Power Mariveles Coal Plant, Philippines
  • Sree Jayajothi Cements Limited - India
  • World Coal - UK
  • KPCL - India
  • Miang Besar Coal Terminal - Indonesia
  • Eastern Energy - Thailand
  • Holcim Trading Pte Ltd - Singapore
  • TeaM Sual Corporation - Philippines
  • McConnell Dowell - Australia
  • Barasentosa Lestari - Indonesia
  • Coal India Limited
  • TNB Fuel Sdn Bhd - Malaysia
  • Malabar Cements Ltd - India
  • NTPC Limited - India
  • Qatrana Cement - Jordan
  • Timah Investasi Mineral - Indoneisa
  • Metalloyd Limited - United Kingdom
  • Marubeni Corporation - India
  • Sakthi Sugars Limited - India
  • Bahari Cakrawala Sebuku - Indonesia
  • Mitsubishi Corporation
  • Savvy Resources Ltd - HongKong
  • Independent Power Producers Association of India
  • Mitsui
  • Renaissance Capital - South Africa
  • Gujarat Mineral Development Corp Ltd - India
  • GHCL Limited - India
  • Samsung - South Korea
  • Maheswari Brothers Coal Limited - India
  • WorleyParsons
  • Jaiprakash Power Ventures ltd
  • bp singapore
  • Globalindo Alam Lestari - Indonesia
  • Carbofer General Trading SA - India
  • San Jose City I Power Corp, Philippines
  • Ministry of Finance - Indonesia
  • Global Green Power PLC Corporation, Philippines
  • Barclays Capital - USA
  • Sarangani Energy Corporation, Philippines
  • ASAPP Information Group - India
  • Dong Bac Coal Mineral Investment Coporation - Vietnam
  • SUEK AG - Indonesia
  • Asia Pacific Energy Resources Ventures Inc, Philippines
  • Neyveli Lignite Corporation Ltd, - India
  • CoalTek, United States
  • CESC Limited - India
  • Sojitz Corporation - Japan
  • South Luzon Thermal Energy Corporation
  • Cargill India Pvt Ltd
  • Russian Coal LLC
  • Makarim & Taira - Indonesia
  • PowerSource Philippines DevCo
  • Anglo American - United Kingdom
  • Rudhra Energy - India
  • Ince & co LLP
  • Ceylon Electricity Board - Sri Lanka
  • GVK Power & Infra Limited - India
  • Salva Resources Pvt Ltd - India
  • Argus Media - Singapore
  • ETA - Dubai
  • Toyota Tsusho Corporation, Japan
  • Grasim Industreis Ltd - India
  • The Treasury - Australian Government
  • Deutsche Bank - India
  • Bangkok Bank PCL
  • Ind-Barath Power Infra Limited - India
  • Chamber of Mines of South Africa
  • Electricity Authority, New Zealand
  • Aditya Birla Group - India
  • CIMB Investment Bank - Malaysia
  • GMR Energy Limited - India
  • Leighton Contractors Pty Ltd - Australia
  • Parliament of New Zealand
  • Indian Energy Exchange, India
  • Truba Alam Manunggal Engineering.Tbk - Indonesia
  • Mercator Lines Limited - India
  • Larsen & Toubro Limited - India
  • Indo Tambangraya Megah - Indonesia
  • Coeclerici Indonesia
  • RBS Sempra - UK
  • Indika Energy - Indonesia
  • DBS Bank - Singapore
  • EIA - United States
  • Intertek Mineral Services - Indonesia
  • Heidelberg Cement - Germany
  • Inco-Indonesia
  • Indian Oil Corporation Limited
  • Semirara Mining Corp, Philippines
  • Thailand Anthracite
  • GNFC Limited - India
  • Baramulti Group, Indonesia
  • The India Cements Ltd
  • Shenhua Group - China
  • Mercuria Energy - Indonesia
  • Petrosea - Indonesia
  • Indonesian Coal Mining Association
  • IOL Indonesia
  • Riau Bara Harum - Indonesia
  • Bank of America
  • Central Java Power - Indonesia
  • Manunggal Multi Energi - Indonesia
  • Peabody Energy - USA
  • Commonwealth Bank - Australia
  • Thomson Reuters GRC
  • London Commodity Brokers - England
  • Kideco Jaya Agung - Indonesia
  • ACC Limited - India
  • Jorong Barutama Greston.PT - Indonesia
  • UOB Asia (HK) Ltd
  • Bangladesh Power Developement Board
  • Maybank - Singapore
  • Vijayanagar Sugar Pvt Ltd - India
  • Idemitsu - Japan
  • MS Steel International - UAE
  • Platts