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Java 1 PLTGU Project Construction Begins

Karawang – The integrated gas infrastructure project and Java I Steam Power Plant (PLTGU) began to enter the construction phase. The plant is officially groundbreaking and will produce electricity at a cheap price, which is US $ 5.5039 cents / kWh.

Director of Strategic Procurement PT PLN (Persero) Supangkat Iwan Santoso said, with such efficient tariffs, PLN could potentially save Rp43 trillion.

“This PLTGU is integrated with the first FSRU, in one contract, in Asia it may even be in the world. The price is very, very competitive. For the size of the PLTGU it is probably the cheapest,” Iwan said in his speech at the Java 1 PLTGU Groundbreaking in Karawang on Wednesday (19 / 12/2018).

Besides being cheap, according to Iwan, a power plant with combined-cycle technology which is targeted to be completed in December 2021 is the most efficient and high-tech plant.
The electricity from the 1,760 megawatt (MW) plant will be channeled to the connection point in the center of the Cibatu 2 industrial area through a 500 kV transmission network and is expected to increase electricity supply for 11 million customers.

“With competitive prices, it will certainly increase not only the supply but also the quality of Cibatu 2 which is a large industry,” said Iwan.

The work on the Java 1 PLTGU is carried out by PT Jawa Satu Power, which is a consortium company from PT Pertamina Power Indonesia (PPI), a subsidiary of PT Pertamina (Persero), Marubeni Corporation, and Sojitz Corporation.

Java I PLTGU will be built integrated with the Floating Storage Regasification Unit (FSRU) with a capacity of 400 MMscfd. The project, located in Cilamaya, West Java, became the first “LNG-to-Power” integrated project in Asia and also one of the largest in the Southeast Asia region.

The Java-1 Consortium has appointed a consortium of General Electric (GE), Samsung C & T, PT Meindo Elang Indah consecutively as a civil engineering and construction contractor, generator turbine supplier and gas pipeline contractor, and maintenance of power plants for 25 years. Meanwhile, Samsung Heavy Industries has been appointed to carry out the construction of the FSRU.

According to the contract, the lifetime of the PLTGU is 25 years and after the contract period has expired, it is left to PLN through the Build, Own, Operate and Transfer (BOOT) scheme. As with power plants, PLN will take over the FSRU contract in the end.

Nicke Widyawati, President Director of PT Pertamina (Persero), said that in the next 36 months, his party is committed to completing the project on time. This project is a strategic project for Pertamina.

“This is a strategic step so we are not only an oil and gas company but also an energy company. Complete, not only selling fuel but also electricity,” Nicke said.

This Java 1 PLTGU, said Nicke, will certainly create a very wide multiply effect for the economy of the Karawang region, Bekasi, and its surroundings. One of them is the employment of 5,000 people during the construction period and around 200 people during the 25-year dive period.

Meanwhile, Coordinating Minister for Economic Affairs Darmin Nasution who was also present was quite relieved and happy, one of the projects included in the National Strategic Project (PSN) and this priority project will soon begin construction.

“Thus, our PSN, which we really think needs to be properly built on time, will increase the capacity of national production,” he said.

The project with an investment of US $ 1.8 billion or around Rp.26 trillion is financed by a consortium consisting of Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance Co., Ltd. (NEXI), Asian Development Bank (ADB), and institutions Commercial banking includes Mizuho Bank Ltd, MUFG Bank Ltd, Oversiea-Chinese Banking Cooperation Ltd., Credit Agricole Corporate and Investment Bank, Societe Generale with a funding scheme for non-recourse project financing, where loan payments are sourced from the project itself.

Overall, this project involves more than 20 domestic and international companies.

Also attending the event were the US Ambassador to Indonesia, Joseph R. Donovan Jr., Japanese Ambassador Masafumi Ishii, and Deputy Regent of Karawang, Ahmad Zamakhsyari.

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