LNG in World Markets: Indonesia’s PLN Eyes Term LNG, Amid Hurdles

This current feature was extracted from the latest edition of Poten’s LNG in World Markets, a monthly service published on June 4, 2024. Indonesian state-run power utility PLN is eyeing long-term LNG supply and has reached out to multiple suppliers since early this year for tentative discussions. The firm, however, faces obstacles that include difficulties in obtaining an LNG import license, uncertainty over cost passthroughs to downstream markets, and other political and commercial issues. PLN is seeking long-term LNG for its increased gas-fired power generation capacity. It plans to add some 20 GW of gas-fired power capacity by 2040, as part of energy transition efforts to phase out coal generation. The utility will supply LNG to the 1.8 GW Jawa-1 LNG-to-power facility in Cilamaya, West Java, where it has a 25-year power purchase agreement from 2021 to 2046. The project started up in 2021 and achieved commercial operations in March 2024.

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