JAKARTA (rambuenergy.com) – Qatar-based Nebras Power has signed on Sept., 2015 a Head of Agreement (HoA) with the Indonesian national utility (PLN) to start a feasibility study to construct a power plant as well as a floating, storage and regasification unit (FSRU) in Indonesia.
The project capacity will reach about 500 MW of electricity and will use the natural gas as a fuel for the plant to be established, Nebras Power said in a statement to the Qatar Stock Exchange.
The plant aims to cover part of the needs of North Sumatra (where it will be built) from electrical power and through a long term PPA that would signed. Commercial operation of the project is expected to begins early in 2019.
The HOA also include a feasibility study for the construction of FSRU for liquefying natural gas to supply the necessary fuel to the plant.
The announcement comes as Indonesian President Joko Widodo visits Saudi Arabia, the UAE and Qatar.
Nebras Power is an infrastructure investment firm which is owned collectively by Qatar Electricity and Water Company, Qatar Petroleum and Qatar Holding.
Nebras Power chairman Fahad bin Hamad al-Mohannadi did not reveal specific details of the project but told Gulf Times that the two companies were “still in the finalisation phase of negotiations on the uptake of the contract and the fuel supply agreement”.
“It is still in the early stages, which is why we cannot quantify the investment. But the project is a full chain starting with the 500MW power plant, which is around $300 million. In addition, there will be a distribution system for gas and also a gas receiving terminal,” al-Mohannadi said.
“At this stage, we do not have the exact figures but this agreement would get the ball rolling towards developing the strategy of investments in Indonesia,” he added.
Citing Indonesia’s plans to generate 35,000MW over the next five years, al-Mohannadi said Nebras was open to plans of increasing the power plant’s capacity. “This will all happen in time if we are successful in developing our project correctly and if we create a good ground for further relations,” he said.
In a speech, Indonesian President Joko Widodo stressed that Indonesia was focused on improving its infrastructure. The government, he added, has also increased its education budget to “refocus” on human capital.
Widodo also encouraged the Qatari government, particularly the business community to take part in Indonesia’s mega projects that are now in the pipeline. These include some 24 new seaports, 15 new airports, 2,630kms of new roads, 35,000MW power plants, and mass rapid transportation systems in as many as 23 Indonesian cities.
“These major projects will complement our aim to establish Indonesia as a manufacturing and production hub. To simplify and ease development, the government has launched a comprehensive economic package, which will give sound platform for the implementation of the projects.
“Indonesia has allocated $21 billion from its 2016 national budget for infrastructure projects. This means that we still need investments from private sector hence, I am inviting our brothers and sisters to make a historic leap in the cultural, economic, social, and political relationship between our two countries. Today is, by far, the best time to invest in Indonesia,” Widodo stressed. (*)