Pertamina Imports Crude Oil from Nigeria

    PT Pertamina (Persero) through PT Pertamina International Refinery (KPI) received a crude oil procurement contract from Nigeria. The import of crude oil was obtained by Pertamina from the Nigerian National Petroleum Corporation (NPCC).

NPCC

    Director of Feedstock and Product Optimization of KPI Yoki Firmandi said this is the first direct contract between Pertamina and NPCC, although Pertamina often buys Nigerian oil. So far, Pertamina has had to buy Nigerian crude oil through the international open market that has a Participating Interest, such as ExxonMobil, Chevron, Shell, Total, and BP.

Pertamina

"With Pertamina's direct deal with NPCC, the procurement process can take place more efficiently. Of course, getting a contract directly will be more efficient. This is in accordance with the refinery feedstock optimization plan in the future,” said Yoki.

    Pertamina was selected as an awardee from a total of 500 companies that registered. NNPC is a Nigerian National Oil Company, like Pertamina in Indonesia. The direct supply contract is very important for bilateral relations between the two countries. Yoki said that Nigerian crude oil is sweet crude.

    This direct contract has a duration from 2021 to 2023. Yoki explained that KPI was not alone in getting this direct contract. Purchasing crude oil directly to the NPCC is expected to increase the efficiency of purchasing crude oil directly to oil producers.

    KPI synergizes with Subholding Shipping PT Pertamina International Shipping (PIS) in terms of transportation. PIS has just launched two new Very Large Crude Oil Carrier (VLCC) vessels, namely MT Pertamina Prime and MT Pertamina Pride. Later the oil will be transported by a ship owned by PIS.

VLCC MT Pertamina Prime

    In addition, Pertamina International Marketing & Distribution, Pte Ltd (PIMD) under Subholding Commercial and Trading also played a role in supporting KPI in obtaining the contract. Vice President of Feedstock and Inventory Management KPI Sani Dinar Saifuddin said Nigerian oil has a large portion of Pertamina's oil import volume. In the 2017-2020 period, 30 percent of the volume of imported crude oil came from Nigeria. Pertamina's crude imports in 2019 amounted to 75.3 million barrels.

"Nigeria is Pertamina's second-largest source of crude oil imports, after Arabian Light Crude supply to FOC I RU IV Cilacap from NOC Saudi Arabia Aramco," said Sani.

 

Aramco

    Meanwhile, crude oil imports this year are projected to increase significantly compared to 2020. According to Pertamina's 2021 projection data, crude oil imports are targeted to reach 118.4 million barrels, an increase of about 50.4 percent compared to last year's crude oil imports which were only 78.7 percent. million barrels.

Nicke Widyawati

    Pertamina President Director Nicke Widyawati said Pertamina needed to maximize the refinery processing capabilities that needed to be supplied with oil. In addition, there was a decrease in GOI entitlement due to the still low Indonesian oil price (ICP).

"We have an increase in imports of 39.7 million barrels," said Nicke.

    Previously, Nicke projected that the volume of crude oil imports this year would increase to 118.4 million barrels. This projection is up 50.4 percent from the realization of crude oil imports throughout 2020 which reached 78.7 million barrels. The increase in crude oil imports is part of Pertamina's refinery optimization strategy.

Republika, Page-9, Wednesday, July 14, 2021

Pertamina Imports Crude Oil Directly from Nigeria

    PT Pertamina (Persero) through PT Refinery Pertamina Internasional (KPI), managed to get a contract to import crude oil directly from the Nigerian national oil and gas company, namely the Nigerian National Petroleum Corporation (NNPC). This direct contract makes the cost of procuring crude oil more efficient. 

the Nigerian National Petroleum Corporation (NNPC)

    In general, Nigerian crude oil is marketed in the international market by the International Oil Company (IOC) which has Participating Interest (PI) in the oil and gas blocks in the country, such as Exxon Mobil, Chevron, Shell, Total, and BP. The direct agreement between Pertamina and NNPC makes the procurement process more efficient.

"Of course, getting a direct contract will be more efficient which is in line with the refinery feedstock optimization plan in the future," said KPI's Director of Feedstock & Product Optimization Yoki Firnandi.

    The crude oil import contract with NNPC is valid from this year until 2023. The entire supply of oil is to meet the feedstock needs of Pertamina's refineries. Previously, for the 2017-2020 period, oil imports from Nigeria reached 30% of the company's total imports. This Nigerian oil belongs to the sweet crude category which is following Pertamina's refinery specifications.

Aramco

"Nigeria is Pertamina's second-largest source of crude oil imports, after Arabian Light Crude supply to the Cilacap Refinery from Saudi Arabia's NOC (national oil company/national oil company), Aramco," said Pertamina's Vice President of Feedstock & Inventory Management, Sani Dinar Saifuddin.

    To get the supply of Nigerian crude oil, Pertamina must compete with 500 companies that register. The direct contract with NNPC is Pertamina's first achievement. Pertamina International Marketing & Distribution Pte Ltd (PIMD) under PT Pertamina Patra Niaga as Subholding Commercial Marketing also supported KPI in getting the contract.

the Pertamina Prime VLCC

    Later, the transportation of crude oil from Nigeria will be carried out by PT Pertamina International Shipping (PIS). Moreover, PIS has completed the procurement of two very large crude carriers (VLCC), namely the Pertamina Prime and Pertamina Pride tankers.

Nicke Widyawati

    Previously, Pertamina President Director Nicke Widyawati said that after forming the sub-holding, subsidiaries were given the freedom to formulate types of crude oil that could produce good quality and better yields of valuable products. So, her party decided to use imported crude oil more. 

    Referring to Pertamina's data, imports of crude oil this year will reach 118.4 million barrels, up 39.7 million barrels or 50.44% from last year's imports of only 78.7 million barrels. Crude oil imports in 2021 are also much higher than imports in 2019 which amounted to 86.9 million barrels.

    This strategy can also reduce the trade balance deficit. This is because the price of imports is lower than the price of Indonesia's oil exports. The average purchase of crude oil imports this year is US$ 57.8 per barrel, while Indonesia's average oil exports reach US$ 59.8 per barrel. She estimates that there will still be a surplus of US$ 75 million.

Investor Daily, Page-10, Tuesday, July 13, 2021

PLN DOMINATES ROKAN'S ELECTRICITY SUPPLY

    PT PLN (Persero) is preparing to control the electricity supply for the Rokan Block after signing a share purchase agreement with PT Mandau Cipta Tenaga Nusantara MCTN), which has been supplying energy for the legendary oil and gas working area.

    PLN President Director Zulkifli Zaini said that with this signing, 100% of PT Mandau Cipta Tenaga Nusantara (MCTN) shares will be owned by PLN. Meanwhile, MCTN is an electricity company owned by Chevron Standard Limited (CSL).

    Through this acquisition, PLN will utilize the gas power plant (PLTG) North Duri Cogen with a capacity of 300 megawatts (MW) previously owned by MCTN to ensure the availability of electricity and steam supply to the Rokan Block during the transition period.

"We will supply electricity and steam to the Rokan Working Area from the PLN side in two stages," he said.

The Rokan Block Chevron

    First, short-term power supply. After the acquisition of MCTN shares, the company's operations will continue for a 3 year transition period. Second, the supply of electricity for the long term. PLN will interconnect the electricity system in the Rokan Block with the Sumatra electricity system.

    PLN's Director of Commerce and Customer Management Bob Sariel said the acquisition was very important for the operation of the Rokan Block. This is done to ensure that the electricity supply does not stop after the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan on August 8, 2021.

PT Chevron Pacific Indonesia (CPI)

“If you want to build a network, it takes 2 years to replace the object or 1 year to relocate. If there is a 1.5-year time lag that causes electricity to be unable to flow to Rokan, of course, the oil Working Area in the Rokan Block will experience a decrease in production, "he said.

    In addition, the acquisition decision is also considered to be better than just entering into a power purchase contract with MCTN or renting the power plant. Moreover, MCTN is the only one that can supply electricity to the Rokan Block.

    After a 3-year transition period, the Rokan Block's electricity needs will be supplied from a more reliable Sumatran electricity system. According to Bob, Sumatra's electricity system has a very strong supply with supplies from a number of steam power plants (PLTU), hydroelectric power plants (PLTA), and geothermal power plants (PLTP) in the region. Currently, the company is building a 500 kV transmission network to strengthen Sumatra's electricity system.

    Regarding investment to support electricity supply to the Rokan Block, PLN has allocated around Rp11 trillion. However, Bob has not been able to reveal more details about the acquisition value of MCTN shares on the grounds that they are still bound by a non-disclosure agreement (NDA). 

    The contents of the MCTN share sale and purchase agreement can only be opened after the administrative and financial processes are completed approximately 1 month after the signing of the share purchase agreement. What is clear, the acquisition funds will come from internal PLN.

Jennifer Ferratt

    Regional Director of Chevron Standard Limited Jennifer Ferratt said that with the completion of the share sale and purchase process, the company is committed to creating a smooth transition in MCTN and in line with the transition of the Rokan Block to Pertamina Hulu Rokan (PHR).

"We would like to thank PLN for working with CSL to achieve fair and mutually beneficial results," said Jennifer.

    Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif added that the Rokan Block has huge potential for oil reserves. Therefore, to be able to provide maximum benefits for the country, a good strategy is needed.

"PLN must ensure a guarantee of electricity supply for the Rokan Block so that Pertamina is able to maintain the sustainability of the production of 25% of the national oil," he said.

    Meanwhile, Deputy Minister I of SOEs Pahala Nugraha Mansury hopes that the follow-up to this sale and purchase agreement will run smoothly and in tandem with the management transfer process which will take place soon.

“The Rokan Block is very strategic for Indonesia because it produces 25% of the national oil production. So far, the majority of electrical energy has been supplied by power plants owned by MCTN, so this agreement is very important to ensure the supply of electricity for the Rokan Block in the future," said Pahala.

    Meanwhile, the acquisition of MCTN shares is a follow-up to the cooperation agreement between PLN and Pertamina Hulu Rokan which was included in the memorandum of understanding for the cooperation in providing electricity and steam in the Rokan Working Area on December 30, 2020, and the sale and purchase agreement for electricity and steam on January 29. 2021.

Pertamina Hulu Rokan (PHR)

BUSINESS EFFICIENCY

    President Director of Pertamina Hulu Rokan (PHR) Jaffee A. Suardin said with this commitment, Pertamina's position would be even stronger because it had ensured the continuity of the Rokan Block's operational activities.

"The presence of PLN for electricity in the Oil Working Area in the Rokan Block is a form of good BUMN synergy, with the hope of increasing business efficiency, especially related to electricity and steam costs which can be more economical and efficient, so as to be able to support the development of Pertamina Hulu Rokan (PHR) oil wells." Pertamina Hulu Rokan (PHR) with better economies of scale," he said.

    Meanwhile, the demand for electricity and steam in the Rokan Block Oil Working Area is 400 MW and 335,000 barrels of steam per day (Mbspd). Most of these needs are supplied from the 270 MW and 265 Mbspd MCTN plants and the remaining needs are met from the Rokan Block Oil Working Area internal generator.

    The electricity and steam supply is to maintain the continuity of oil production in the Rokan Block Working Area which is expected to be maintained at around 160,000 thousand barrels per day this year with the addition of new wells being drilled. Currently, the Rokan Block production is recorded at 162,951 barrels per day, which is the second-largest production after the Cepu Block in East Java, Indonesia.

    Energy Watch Executive Director Mamit Setiawan explained that the process of signing a share purchase agreement between PLN and MCTN was a new step in the Rokan Block transition process. According to him, through this process, the problem of electricity and steam supply for the Rokan Block can be resolved in the future.

"SOE synergy between Pertamina and PLN is a strategic step in developing and helping fellow SOEs considering the Rokan Block is the backbone of national oil production," said Mamit.

Bisnis Indonesia, Page-4, Wednesday, July 7, 2021

Electricity Supply for Rokan Block, PLN Officially Acquires MCTN Shares

    PT Perusahaan Listrik Negara (PLN) (Persero) officially acquired 100% shares of PT Mandau Cipta Tenaga Nusantara (MCTN) which is owned by Chevron Standard Limited. 

    This acquisition is proof of PLN's commitment to maintaining the continuity of the Rokan Block electricity supply, both during the transition period and in the long term. Moreover, the Rokan Block is the backbone of national oil production.

The Rokan Block Chevron

    The acquisition process was marked by the signing of a sales and purchase agreement (SPA) by the Director of Commerce and Customer Management of PLN, Bob Sariel, and Regional Director of Chevron Standard Limited, Jennifer Ferratt, online.

Director of Chevron Standard Limited, Jennifer Ferratt

    This agreement was also witnessed by Minister of Energy and Mineral Resources Arifin Tasrif, Deputy Minister I of BUMN Pahala Nugraha Mansury, Head of SKK Migas Dwi Soetjipto, President Commissioner of PLN Amien Sunaryadi, President Director of PLN Zulkifli Zaini, and the management of Chevron Standard Limited as the majority shareholder of MCTN.

Blogger Agus Purnomo in SKK Migas

    Zulkifli said that the acquisition of the MCTN shares is proof of PLN's commitment to maintaining the continuity of the Rokan Block electricity supply, both during the transition period and in the long term. Moreover, the Rokan Block is the backbone of national oil production.

the Rokan Block Chevron

    As is known, the management of the Rokan Block from August 9, 2021, will shift from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR). So far, the electricity and steam supply for the Rokan Block comes from the North Duri Cogen Gas Power Plant (PLTG) with a capacity of 300 Megawatts (MW) which was previously owned by MCTN, a subsidiary of Chevron Standard Limited (CSL).

PT Chevron Pacific Indonesia (CPI)

"We would like to thank Chevron Standard Limited (CSL) for the good cooperation and for the good electricity in the Rokan Work Area as long as it is managed by Chevron Pacific Indonesia," said Zulkifli virtually in Jakarta.

    The acquisition of MCTN shares is a follow-up to the cooperation agreement between PLN and PT Pertamina Hulu Rokan (PHR) which was included in the Memorandum of Understanding (MOU) for the Provision of Electricity and Steam for the Rokan Region on December 30, 2020, and the Sale and Purchase Agreement for Electricity and Steam on January 29, 2021.

    Zulkifli hopes that, through the signing of the sale and purchase of shares, a good partnership can be established as the first step in building partnerships and cooperation between PLN and Chevron Standard Limited (CSL) in the future. 

    In the future, this power plant will be used for three years to serve electricity needs in the Rokan Block. Both during the transition period together with PLTG Migas and Central Duri until finally it will be supplied from the Sumatra interconnection system.

“In the long term, reliable and competitive supply of 400 MW of electricity in the Rokan Block will be supplied from the Sumatra and 335 MBSPD Steam system using the New Steam Generator. Within 3 years the interconnection of the system and the New Steam Generator will be fully operational," he added.

    In addition, the provision of reliable electricity supply from the Sumatra System to the Rokan Block is carried out from three sources.

"PLN prioritizes aspects of safety, reliability, quality, and efficiency in meeting the energy needs of the upstream oil and gas industry," he said.

    PLN as a BUMN that is given the mandate in the electricity sector, has an obligation to meet electricity needs and provide the best service for all customers, including industrial customers, one of which is the oil and gas sector, both from upstream and downstream.

“PLN as the most experienced electricity provider in Indonesia has a special design and strategy in providing electricity for the oil and gas industry. Currently and in future plans, PLN's large systems such as Java, Sumatra, Kalimantan, and Sulawesi have a very large reserve margin (40-50%) to be able to serve the needs of the oil and gas industry," said Zulkifli.

    Regional Director of Chevron Standard Limited, Jennifer Ferratt said, with the completion of this process, it is hoped that the transition at MCTN can take place smoothly and in line with the transition of the Rokan Block to PT Pertamina Hulu Rokan (PHR).

    Minister of Energy and Mineral Resources Arifin Tasrif added that the Rokan Block has huge potential for oil reserves. Therefore, to be able to provide maximum benefits for the country, a good strategy is needed. With this agreement, PLN will continue to use the North Duri Cogen PLTG before the Rokan WKB electricity supply is supplied by the Sumatra system interconnection network.

“PLN must ensure a guaranteed electricity supply for the Rokan Block so that Pertamina is able to maintain the sustainability of the production of 25% of the national oil. Therefore, power plants must be reliable with more efficient costs, so that they can provide much better benefits for the nation and state," he said.

    The Deputy Minister of State-Owned Enterprises, Pahala Nugraha Mansury, also appreciated PLN and CSL for successfully completing the transfer of ownership of MCTN. He also hopes that the transition process in this one month can go hand in hand with the Rokan working area from Chevron to Pertamina smoothly.

“The Rokan Block is very strategic for Indonesia because it produces 25% of the national oil production. So far, the majority of electrical energy has been supplied by MCTN's power plants. So this agreement is very important to ensure the electricity supply for the Rokan Block in the future," he added.

Support Pertamina's Production

    Meanwhile, Pertamina expressed its appreciation for the signing of the SPA to fulfill the electricity needs of the Rokan Working Area (WK).

PT Pertamina Hulu Rokan (PHR)

"Pertamina appreciates the agreement process between Chevron Standard Limited and PLN related to efforts to meet the electricity needs for Rokan WK," said PT Pertamina Hulu Rokan (PHR) President Director Jaffee A. Suardi.

    Furthermore, Jaffee added that this commitment will certainly strengthen Pertamina's position, in this case through PT Pertamina Hulu Rokan (PHR), to ensure the continuity of production of the Rokan Oil and Gas Block Working Area, which of course contributes significantly to national oil and gas production.

Investor Daily, Page-10, Wednesday, July 7, 2021

Pertagas Optimistic Rokan Pipe Completed On Time

    PT Pertamina Gas (Pertagas), a subsidiary of PT Perusahaan Gas Negara (PGN) Tbk, is optimistic that it will be able to complete the oil pipeline project in the Rokan Block on time in early 2022. This pipeline is needed to keep the Rokan Block oil production stable when its management is transferred to PT Pertamina (Persero) in August.

The Rokan Block Chevron

    Pertagas Communication, Relations & CSR Manager Elok Riani Ariza said, according to government directives, strategic project construction activities must continue, including the construction of the Rokan Oil Pipeline block. His party strives for this national strategic project to be completed on time.

"As of the end of June, the construction progress has reached 71.33%," said Elok.

The Rokan Block Chevron

    The Rokan Block Oil Pipeline has the potential to flow around 200-265 thousand barrels of oil per day (BPD). The project is targeted for commercial operation in stages until it is fully completed in early 2022.

    The North Block, which includes the Balam-Bangko-Dumai Corridor, is targeted to operate in the third quarter of 2021. Then the South Block, namely Minas-Duri, is targeted to operate in the 1st Quarter of 2022. The Rokan Block Pipe Project has a diameter of 4-24 inches. The pipeline consists of 12 segments and three stations, namely Duri Station, Dumai, and Manifold Batang.

    In each pipe segment, there is a pig launcher and receiver including accessories. The pipeline also has a Sectional Break Valve (SBV) in 24 locations, Horizontal Direct Drilling (HDD) in 12 locations, as well as a Leak Detection System for all sections and an Oil Transport & Management System. The pipe is approximately 367 kilometers (km) long and passes through 5 regencies and cities, 14 sub-districts, and 38 villages and sub-districts. Apart from pursuing construction targets, the safety aspect remains Pertagas' main concern.

"The project, which started with first welding on September 10, 2020, has successfully passed 2.18 million safe working hours until June 25, 2021," said Elok.

    To date, the Rokan Oil Pipeline project has recruited 76% of the local workforce of a total of 2,404 workers. This is in accordance with the direction of the Regent of Rokan Hilir Afrizal Sintong when receiving a visit from the Director of Infrastructure and Technology of PGN Achmad Muchtasyar and the Director of Engineering and Operations of Pertagas Rosa Permata Sari at the office of the Regent of Rokan Hilir, City of Bagansiapiapi.

"We hope that this project will have a positive impact on the development of the Riau region in general and be able to contribute significantly to increasing human resource capacity, and transferring knowledge in areas that are passed by the pipeline in particular," said Elok.

    She also hopes that this project can support energy security and contribute positively to improving the national economy. At the same time, the process of managing the Rokan Block continues. Previously, PT Pertamina Hulu Rokan (PHR) stated that the mirroring process for existing contracts has now reached 95% or 276 contracts out of a total of 290 contracts. 

    On the other hand, PT Chevron Pacific Indonesia has completed the PSC termination checklist provisional document on February 25, 2021. In addition, as of May, asset reporting has reached 81%, of which around 109 thousand assets have been physically inspected and reported. While the closing of project reports reached 70% or around 2,940 reports that have been completed.

    Pertamina Hulu President Director Rokan (PHR) Jaffee A Suardin had said that his party was trying to make the transfer of management process run smoothly according to the timeline.

"So that on August 8 and 9, 2021, there will be a seamless management transfer process, without pause, both in terms of operations and support," said Jaffee.

Investor Daily, Page-10, Wednesday, July 6, 2021

PHR Ensures Rokan Block Worker's Transition Runs Smoothly

    PT Pertamina Hulu Rokan (PHR) ensured that the process of transferring the management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) went smoothly. One of the priority aspects is the worker transfer process. PHR has sent an acceptance letter and an employment agreement to all CPI employees.

PT Chevron Pacific Indonesia (CPI)

    As a result, of the 2,700 workers, as many as 98.5% have returned and signed the Work Agreement, and only 1.5% of the workers who did not return it with reasons including because they are nearing retirement age and want to retire early, continue their studies to a higher level of education. height, and other reasons. PHR President Director Jaffee Arizon Suardin welcomed the progress of returning the Acceptance Letter and Employment Agreement by CPI workers.

“Thank you for the positive response given. By joining CPI employees into the Pertamina family, they will have wider career opportunities in the Pertamina Group. I believe, together we can become a solid team, collaborate and synergize to develop the company's business today and in the future to maintain national energy security," said Jaffee.

    Meanwhile, Senior Vice President Rokan Transition CPI Wahyu Budiarto expressed his appreciation to Pertamina and all parties who have supported this process so that the transition went very well.

the Rokan Block Chevron

“The transition in the field of human resources is very important and the most critical in supporting the transfer of management of the Rokan Block. Therefore all steps are prepared together perfectly to achieve a safe, reliable, and smooth transition. Appreciation to Pertamina and all parties who have supported this process so that the transition went very well.” said Revelation.

    PHR has opened a channel of communication for all CPI workers so that all questions can be answered. The channels consist of the Town Hall Meeting which was held online on June 3, 2021 (attended by more than 2000 participants) and June 7, 2021 (attended by more than 2300 participants), Manager Forum on June 9, 2021, which was attended by management levels at CPI. The HC (Human Capital) Corner is an online live event program held every day from June 10, 2021, to June 18, 2021. In addition to these channels, a contact center has also been opened via email to submit personal questions.

Investor Daily, Page-9, Saturday, July 3, 2021

PLN Take Over Electricity Block Rokan and INCO

    The development of the Cogen PLTGU auction process in the Rokan Block and the provision of electricity for the PT Vale Indonesia Tbk (INCO) smelter began to be revealed. The latest news is that PT Perusahaan Listrik Negara (PLN) is preparing to acquire 100% of Cogen's PLTGU shares in the Rokan Block and provide electricity for the INCO smelter.

the Rokan Block Chevron

    PLN's Director of Commerce and Management, Bob Saril said, PLN would acquire the Cogen PLTGU with a capacity of 300 MW owned by a subsidiary of Chevron Standard Limited named PT Mandau Cipta Tenaga Nusantara (MCTN).

"We are in the process of taking over 100% of the shares (PLTGU Cogen). If the value has not been announced, we can convey," he said.

    In 1990, MCTN built the plant with an investment of around US$ 120 million. However, currently, in the auction process by MCTN, the value is said to reach US$ 300 million. "There are funds for the acquisition (PLTGU Cogen)," said Bob.

    PLN's management is currently in the negotiation process with Chevron Standard Limited (CSL), which is the parent of MCTN. In fact, PLN claims to have succeeded in reaching agreements regarding the provisions of the conditional share purchase agreement (CSPA). "There will be a share purchasing agreement, we can sign it in the not too distant future," he said.

    Bob confirmed that by the end of June there should be certain regarding the acquisition process. This week, MCTN will announce the results of the auction. "If you look at the auction process or the sale of shares, they (MCTN) will announce this week. Then they have one month to wait if there are questions from outside. After that, we will sign," said Bob.

    Not only the power plant in the Rokan Block, but PLN has also signed an agreement with PT Vale Indonesia Tbk to provide electricity for the smelter that needs to be built. Bob said that PLN had signed a non-disclosure agreement (NDA) with INCO in May 2021. 

    PLN is currently in the discussion stage of data sharing and information regarding the construction of the INCO smelter in Sulawesi. However, so far there has been no memorandum of understanding (MoU) or transaction agreement agreed or signed between the two.

"(However) it is already in the stage of detailed discussion in that direction," said Bob.

    Similar to the Cogen PLTGU, Vale's PLTGU with a capacity of 500 MW is also undergoing an auction period which is being followed by Medco-Pertamina Power, Golar-Equinox, and Tripatra-BP. 

"PLN is optimistic that it can compete with other parties to be appointed as the party trusted to supply INCO's smelter electricity," said Bob.

    If successfully appointed, PLN will connect the INCO smelter to the Southeast Sulawesi and Central Sulawesi electricity systems. If necessary, PLN is also ready to relocate the PLN's Gas and Steam Power Plant (PLTGU) on the island of Java. According to Bob, this option will not interfere with the reliability of the electricity supply in Java. This is because the reserve power available in Java-Bali is still large, which is around 45% of the peak load.

Kontan, Page-13, Thursday, June 24, 2021

PLN Optimistic to Win MCTN Majority Share Auction Worth US$ 300 Million

    PT PLN (Persero) is optimistic that it will win the auction of PT Mandau Cipta Tenaga Nusantara (MCTN) shares which are offered at a price of US$ 300 million. MCTN is the operator of the North Duri Cogen (NDC) Gas Power Plant (PLTG) which supplies electricity and steam to support oil production in the Rokan Block. This acquisition follows the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR).

PT Chevron Pacific Indonesia (CPI)

    PLN's Director of Commerce and Customer Management Bob Saril said that the process of acquiring a 95% stake in MCTN of PT Chevron Standard Limited (CSL) in MCTN is still in the negotiation process. However, his party has reached an agreement regarding the sound of the articles in the conditional sales purchase agreement (CSPA). Winners will be announced this week.

"We are coordinating the negotiations, hopefully in the not too distant future we will close, we will get PLN's 100% MCTN shares," he said in a statement.

discussion of Power Supply Reliability Keeps Rokan Block Production.

    He explained, because it is the acquisition of share ownership, later MCTN will become a subsidiary of PLN. This means that there will be no change in operator from PLTG NDC so that it will continue to operate normally when there is a transfer of management of the Rokan Block to Pertamina in August. 

the Rokan Block Chevron

    After the announcement of the winner of the stock auction, there will be a grace period of one month. However, it is certain that the acquisition of MCTN shares can be completed before the transfer of management of the Rokan Block takes place.

“From August 8 to August 9 [MCTN] will take place as usual. A week or even before that, the share shares have been taken by [PLN], as well as the business license has been referred to PLN, “said Bob.

PT Pertamina Hulu Rokan (PHR)

    He hopes that the government can provide support related to the required permits. As for the other two power plants, namely PLTG Minas and Central Duri, he said that PT Pertamina Hulu Rokan (PHR) will still be managed in the next year. After that, his party hopes that these two power plants can also enter the PLN system so that they can be renewed. PLTG NDC will also be updated by his party.

"So this 400 MW can be managed by PLN," he said.

    For the long term, his party will supply electricity to the Rokan Block from the Sumatra Electricity System. This will make the electricity supply more reliable and efficient than if only relying on PLTG. Moreover, the electricity reserve (reserve margin) of the Sumatra System has reached 35-40%. 

    The Rokan Block's electricity supply will come from three sources, namely from the New Garuda Sakti Transmission-Balai Pungut 290 MW, the Duri Transmission-Balai Pungut 240 MW, and the Balai Pungut Generator 250 MW. In addition, PLN will equip it with high-voltage (TT) compensator facilities and a 5x100 MW converter. All of these facilities will be operational within the next three years in 2024.

"So if a power plant goes out of the system or is under maintenance, the electricity supply remains as it is," explained Bob.

    In addition to the electricity supply, Bob also emphasized that his party will guarantee the supply of steam to the Rokan Block. His party will supply the steam needs of 335 thousand barrels of steam per day/ BSPD using a new steam generator which is also targeted to operate in the next three years. 

    PT Pertamina Hulu Rokan (PHR) Business Support Project Leader Danang Ruslan Saleh said the Rokan Block operation requires a supply of 400 MW and 335,000 BSPD of steam. Around 270 MW or 60-70% of electricity supply so far comes from PLTG NDC. Likewise, the steam supply of 70 thousand BSPD or 70-80% of the total demand also comes from this facility. The continuity of this supply will determine the Rokan Block's oil production.

"But we are now with a Production Sharing Contract / PSC gross split, so we are required to be very efficient, including in the supply of electricity, steam, and gas," he said.

    Pertamina is said to be committed to continuing to boost oil production in the Rokan Block. A number of programs have been prepared by his parties, such as infill drilling and water floods. So that, in the future, the Rokan Block can still be the main contributor to national oil production.

"We are working massively and aggressively to increase the Rokan Block's oil production," said Danang.

    PLN and PT Pertamina Hulu Rokan (PHR) have also signed the Electricity and Steam Sales and Purchase Agreement (SPJBTLU) on February 1, 2021. This SPJBTLU will come into effect in August 2021.

Investor Daily, Page-10, Wednesday, June 23, 2021