Qatar-based energy company Nebras Power will invest $1bn for the development of an 800MW natural gas-fired power project in the Indonesian island of Sumatra.
Nebras Power will allot $800m for the power station while the remaining $200m will be spent on a floating storage and regassification unit (FSRU), reported Reuters, citing Indonesia Deputy Energy and Mineral Resources Minister Arcandra Tahar.
The FSRU will process liquefied natural gas (LNG) that will be used as fuel for the power plant.
Nebras Power along with Indonesian government-owned electric utility Perusahaan Listrik Negara (PLN) and state-owned power producer Pembangkitan Jawa-Bali (PJB) has inked a heads of agreement (HOA) for what will be a gas to power (GTP) project.
According to a report in The Peninsula, the HOA is for the development of the power plant, the FSRU and also for the sourcing of LNG at Medan in Sumatra. The proposed Indonesian power project is planned to begin commercial operations in 2019-2020.
Nebras CEO Khalid Jolo was quoted by the publication as saying: “This HOA comes within the framework of promoting further economic cooperation between Qatar and Indonesia, and we hope to further strengthen the foundations for a long-lasting relationship.
“This cooperation reflects the trust of the Indonesian Government in Nebras Power, which will make us work closely with our partners to support PLNs long-term plans to meet the growing needs of the Indonesian energy market.”
As per the terms of the HOA, Nebras and PJB will be responsible for the power plant and the FSRU’s development, financing, construction along with their operation and maintenance.
Under a power purchase agreement (PPA), PLN will buy the power generated from the combined cycle power plant for 25 years.
With the new investment in Indonesia, Nebras Power expands its footprint in the country further following the acquisition of a stake of 35.5% stake in Paiton Energy from Engie in late 2016. Paiton Energy, an independent power producer, is the owner of a 2,045 MW thermal power station located in East Java.
Image: Nebras Power had previously invested in Paiton Energy which owns a 2GW Indonesian thermal power plant. Photo courtesy of Nebras Power.