The increase of the need of electricity throughout Indonesia, gas is one of the viable energy sources to meet the demand. The gas is not only cleaner than fuel oil but it is also competitively cheaper up to 40 percent. The PLN – State Owned Electricity Company is also trying to reduce the subsidy of electricity cost in Indonesia by shifting the fuel oil power plants to gas. In many parts of Indonesia, many power plants located in marginal locations and are still consuming diesel fuel as the base load power generation system. This situation considers to substituting the diesel to gas fuel and also trying to resolving the constraints of gas transportation from the island or location has plenty gas reserves to the island or location where the fuel oil power generations located. As the small to mid-scale LNG emerged, the option to build the LNG receiving terminal facilities becoming considered. PLN opened the public tender some time on January 2016 to invite the international players in LNG sectors for LNG supply for distributed gas power plants in central region of Indonesia. There are 21 locations considered as marginal and scattered requiring LNG to feed their existing and new power plants which will typically use dual fuel system (gas and diesel).
The scope of the projects tendered by PLN, a State-Owned Electricity Company consisted of (1) To provide LNG supply and distribution management master plan for power generation supply at central region of Indonesia (2) To supply and distribute gas to distributed gas power generation demand at central region of Indonesia continuously for 10 years and (3) To build LNG receiving terminals consisting of jetty, storage, and regasification facility for each power generation at central region of Indonesia. Those LNG receiving terminals will be operated by the consortium companies that win the bidding under the scheme of Build, Operate and Transfer (BOT) for 10-year operation. The capacity of new and existing power generations ranged from 5 to 450 MW and will require different LNG Receiving facility for each of those. The consortium that was bidding for this project requiring the EPC contractor who can undertake the portion of LNG Receiving Terminal facilities starting from Pre-FEED, FEED and EPC phases. If the EPC Contractor was part of consortium, then they will submit the price based on project phases mentioned earlier. But, if none of the leader or consortium members have those EPC capabilities then It would be subcontracted to the EPC contractor who can do these works. The project duration of these 21 LNG Receiving facilities is less than 24 months.