Rapidly expanding AG&P LNG has won a contract from Indonesian state power provider PT PLN (Persero) to provide the infrastructure and logistics to supply 2.3m tonnes per annum of LNG imports to support seven power plants in the country’s eastern island grouping of Sulawesi-Maluku.
Speaking to TradeWinds ahead of a signing ceremony today, AG&P LNG chief executive Karthik Sathyamoorthy explained that this will entail supplying a floating storage and regasification unit that will act as a mothership at one location, a small-scale LNG carrier to distribute the LNG, along with the onshore facilities required at six other locations throughout the islands.
The infrastructure for the LNG supply — to what is the largest cluster of currently diesel-fired power plants in Indonesia with a combined generating capacity of 1,510 MW — is due to be ready for operation by the end of the first half of 2026.
AG&P LNG, which was snapped up by US-based Nebula Energy in January, said it had been awarded the exclusive 20-year contract by PLN’s internal fuel-sourcing subsidiary PT PLN Energi Primer Indonesia (PLN EPI) following a tender launched in 2023.
The contract is being signed by a consortium comprising AG&P LNG subsidiary PT AGP Indonesia Utama (AG&P Indonesia), along with Suasa Benua Sukses and KPMOG for the co-development, ownership and operation of the new facilities.
The consortium and PLN EPI will set up a joint venture to work together on the design, financing, construction, ownership and operations of all offshore and onshore infrastructure for the LNG terminals in the cluster.
The LNG will be supplied by PLN EPI — both the customer and shareholder in the venture — from its allocation of domestically produced volumes.
Giving more details, Sathyamoorthy said that under the plan LNG will be shipped in by PLN EPI, initially from Indonesia’s Tangguh LNG project, to the FSRU, which will be moored off Huadi in southern Sulawesi.
Sathyamoorthy and Nebula chief executive Sam Abdalla, who is also vice chairman of AG&P LNG, said the plan is to convert an existing LNG carrier of about 135,000 cbm into the FSRU. AG&P Group company Gas Entec of South Korea, which has experience in small-scale LNG projects in Indonesia and conversion jobs, has been lined up to take on this work.
Several LNG carrier conversion candidates have been identified.
The 23,000-cbm small-scale shuttle LNG carrier, which will take on breakbulk shipments from the FSRU, will be a newbuilding. A 14-day milk round trip for the vessel from Huadi calling at Kolaka, Bau-Bau, Kendari, Gorontalo, Ternate and Ambon, would cover about 2,200 nautical miles (4,074 km).
Abdalla said agreements with the sellers of LNG carriers and the shipyards for the conversion and newbuilding jobs are expected to be finalised within three to four months.
Onshore facilities, including some bullet tanks or floating buffer LNG storage, will also need to be put in place.
Sathyamoorthy and Abdalla stressed that all elements will need to be agreed upon with the consortium members.
National importance
Sathyamoorthy described the Indonesian project as being of “national importance” and said it would “support the country’s overall goal to reduce the usage of liquid fuel by about 1.7 million kilolitres per year across all its power clusters”.
Nebula said switching the power plants to run on LNG will save about 9.2m tonnes of CO2 emissions per year.
PLN EPI director of gas and fuel Rakhmad Dewanto said the company is currently developing both portfolio LNG supply and LNG midstream infrastructures for the power sector.
“This partnership will be pivotal to the development of LNG midstream infrastructures to power cluster project[s] in Indonesia, where the Sulawesi-Maluku cluster is the largest,” Dewanto said. “This will be a milestone in our country’s continued transition towards more reliable and cleaner energy.”
AG&P LNG has moved swiftly on its planned growth pipeline of six LNG terminals since Nebula came on board as the main shareholder.
The company is already the operator of the Batangas Bay-based Philippines LNG (PHLNG) Import Terminal — the first such facility in the country.
On 7 March, AG&P LNG dived into Vietnam taking a 49% stake in Hai Linh Co’s $500m, 3.0-mtpa terminal, which is due for start-up this year.
Abdalla assured that this new project in Indonesia is just one of the six terminals in the project pipeline.
