Photo by Andalas

JAKARTA (TheInsiderStories) -UK-listed Andalas Energy and Power Plc and PT PP Energi (PPE), unit of state-owned engineering firm PT PP Tbk (IDX: PTPP) has signed an agreement to develop gas-fired power facilities in the Southeast Asian (SEA) nation. Andalas to propose at least three projects to PPE within three months.

It said, the agreement covers independent power producer (IPP) projects across Indonesia, including those developed from gas supplied by state-owned energy firm PT Pertamina and by third party gas owners.

Its expected that PPE will be a suitable partner to join it and Pertamina in developing IPPs under Andalas’ existing agreement using gas from Pertamina’s portfolio of discovered gas fields in Sumatra.

David Whitby, CEO of Andalas Energy & Power, commented: “Our relationship with Pertamina is creating a new gas to power business in Indonesia. PPE is a motivated and strategic partner that we believe brings unique skills, relationships and financial resources to a project consortium that we expect will further enable Andalas to deliver its target of 250-500 megawatts (MW)”.

PPE parent company, PTPP, is listed on the Indonesian Stock Exchange (IDX) with a market capitalization of approximately US$1.4 billion and generated revenue of $1.2 billion in 2016. The group is one of the largest construction and investment groups in Indonesia and is considered a preeminent engineering procurement and construction contractor of Indonesian independent power producer projects.

PTPP joined with PT Perusahaan Listrik Negara, having constructed 14 power projects for the state-owned power producer totalling 2,168 MW since 2012. On May 9, PTPP conducted a groundbreaking the EPC project, gas-engine power plant (PLTMG) MPP Jayapura with capacity 500 MW located at Hotelkam, Papua province.  

in the first half of 2017, the company booked new contracts of Rp. 20.2 trillion. This achievement reflects the growth of new contracts by 43 percent compared to the same period the previous year amounted to Rp14.1 trillion.

Tumiyana President Director of the Company explained, the new contract amounting to Rp. 20.2 trillion consists of the Company’s new parent contract amounting to Rp17.8 trillion and subsidiaries amounting to Rp2.4 trillion.

Several projects has manage by PTPP during June, among others the development of Marine Facilities and Oil Storage Tanks Raw 3×200.000 m3 in Bantaeng South Sulawesi worth Rp2.3 trillion, Toll Road Bakauheni Roundroad Big Package 1 Bakauheni-Sidomulyo (continued) Rp1.1 trillion, Depok Stater City Rp1 trillion, Runway 3 Soekarno Hatta Airport (Taxiway) Rp658 billion, Construction of Bendungan Lolak Paket II Rp447 billion, CSTS Tangguh Rp390 billion, Universitas Negeri Surabaya Rp. 165 billion, Railway Bandar Tinggi Kuala Tanjung Rp163 billion, and University of Tanjung Pura West Kalimantan Rp159 billion.

“With pocketing new contract Rp20.2 trillion in the first half, we are is still optimistic this year target of Rp40.6 trillion can be exceeded by the end of this year “, said Tumiyana.

Meanwhile, the Company projected in the first semester of 2017 to earn revenues Rp8.1 trillion or grew 27 percent compared to the same period in 2016 amounting to Rp6.4 trillion. With operating revenues of Rp8.1 trillion, the company predicted to reap net profit Rp625 billion in the first half of this year or grew 52 percent over the same period of the year Rp410 billion.

To improve the company’s performance in 2017, the Company is currently preparing three subsidiaries PT PP Presisi, PT PP Urban dan PP Energ to float their shares at the IDX. PP Presisi is targeted to be able to immediately float on the IDX in October 2017.

The IPO registration statement process to the Financial Services Authority and the Indonesia Stock Exchange may be immediate
do. As the PPO Precision IP process proceeds, the Company will also implement the process IPO of PP Urban and PP Energy to be able to float on the Exchange in fouth quarter of 2017.

While Andalas Energy is a London’s traded energy company focused on power generation and exploration and production activities in Indonesia. Currently, the company manage The Siak Block, located onshore in the Central Sumatran Basin and Tuba Obi East in Jambi Province.

To date, Siak has produced more than 50 million barrels of oil from nine fields and currently produces around 1,700 barrels of oil per day from three oil fields Lindai (100 percent within the block), Batang (unitized 65 percent/35 percent with Chevron’s Rokan PSC) and Menggala South (unitized 35 percent/65 percent with Rokan PSC).

Unit of Pertamina, PT Pertamina Hulu is undertaking an extensive production optimization programme and numerous infill, acceleration, and step-out opportunities have been identified within the three producing fields.

According to Mckinsey & Co, by 2020 domestic gas demand to grow ten-fold and International gas market worth up to $10 billion. And by 203, the world’s seventh largest economy has 135 million consumers, upstream energy market generating a turnover of $270 billion and 47 percent of primary energy demand met by oil and gas

Sumatra is the engine room of the Indonesian oil and gas industry, with approximately 50% of the country’s oil and gas opportunities and in excess of 70 oil companies operating in the region, including the national oil company, Pertamina, and super-majors ConocoPhillips, CNOOC, Petrochina, Chevron, and Exxon Mobil.

The national electrification rate, as at today, is 88.4 percent which is low compared to its ASEAN neighbour.  There is currently a nationwide gas and power shortage with power outages and gas shortages rampant across the archipelago.

The Government of Indonesia is aiming for electrification rates of 99 percent by 2020 but to achieve this, the nation must address significant challenges.  Significant investment is required in installing additional power infrastructure as insufficient power is and will continue to hamper economic growth.

Indonesia has announced an ambitious programme to add 35 gigawatt of electricity generation within the next 5 years to prevent an electricity deficit and to support economic growth.

(Written by Linda Silaen, Email: linda.silaen@theinsiderstories.com)

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