Andalas Joins Pertamina in Commercializing Marginal Gas Fields in Indonesia

Andalas Energy and Power Plc, disclosed Thursday that it has signed an agreement with state-owned PT Pertamina to establish a joint working and steering committee to fast-track commercialization of marginal gas fields within the latter’s acreage in Indonesia.

The agreement will tap on Andalas’ expertise and Pertamina's local knowledge to make a significant contribution at the local level towards fulfilling the government’s goal of reducing the country’s power shortfall. Indonesia seeks to increase electricity generation capacity by 35,000 megawatts (MW) by 2019.

Both firms will initially focus on identifying at least 5 stranded gas fields within Pertamina’s acreage in Riau, Jambi and South Sumatra provinces which are suitable for sub-100 MW gas-to-power development in the form of an independent power project (IPP). Andalas has identified all target areas that have an abundance of stranded gas fields, with all field and IPP development plans to be based on modular/mobile power plants.

When the fields have been identified, both firms will sign an exclusive joint development agreement (JDA) to design, construct, fund and operate the IPPs. Suitable partners may be invited to join the 2 companies in the JDA for each development. They will work to generate IPP commercialization plans for each of the identified marginal gas fields covering all key aspects of any future investment and approval; covering project design, project cost and economic analysis and all regulatory requirements.

"Working in partnership with Pertamina ... is in our view a testament to the strength of Andalas’ gas-to-power business concept and the caliber of both our Board and local management team, who have an intimate understanding of the country’s energy sector. Andalas already has the team and network to make sure the partnership has at its disposal everything needed to deliver the targeted IPP commercialization plans," Andalas CEO, David Whitby, said in the press release.

"Pertamina ... has in-depth knowledge of Indonesia’s oil and gas sector, as well as a substantial portfolio of stranded gas discoveries in South Sumatra where there is a major need for power ... Together Pertamina and Andalas are uniquely positioned to make a significant contribution to Indonesia’s economic growth by helping to meet the country’s growing demand for electricity at both the industrial and household level," he added.

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