4 November
2016
Andalas Energy and
Power Plc
(‘Andalas’, or the
‘Company’)
Gas to Power
Update
Andalas Energy and Power Plc (AIM: ADL), is pleased to provide
an update on its landmark agreement (the ‘Agreement’) with PT
Pertamina (Persero) (‘Pertamina’). The Agreement sees both
parties working in cooperation to fast-track the commercialisation
of marginal gas fields within Pertamina’s acreage in the Sumatran
provinces of Jambi, Riau and
South Sumatra, via the roll-out of
the Company’s gas to power strategy (see announcement of
1 September 2016 for further
details).
Highlights:
- Material progress continues to be made under our cooperation
agreement with Pertamina;
- Award of conceptual design contract to engineering subsidiary
of PLN over first project;
- Preliminary assessments of the first project demonstrate strong
economic fundamentals for both the upstream and the power
generation; and
- The unexploited gas discoveries in Riau, Jambi and South Sumatra total 5.1 trillion cubic feet,
highlighting the depth of opportunity from which to replicate the
gas to power model.
Pertamina and Andalas have been focussing their efforts towards
identifying projects capable of monetising existing gas discoveries
through in-situ power generation. The Company has conducted
an exhaustive study of the inventory of discovered gas on the
island of Sumatra, which is the
‘engine room’ of the country’s oil and gas industry.
The first joint gas to power project has been selected by
Andalas and Pertamina. The project is located within the
target area and is founded on an existing conventional gas
discovery that is close to infrastructure and power demand
centres. It is clear that further suitable developments exist
from which to select the remaining four projects that are
envisioned under the cooperation agreement.
As a critical step in the approval process of the project, PLN
E, the engineering subsidiary of the national electricity company,
PLN, was contracted on 1st November 2016, to develop the conceptual design
study for the power plant for the project, which is scheduled to
take up to three months.
The study will incorporate the following:
- Electrical power system study of the target area
- Site identification for the proposed power plant
- Conceptual design of the power plant
- Project implementation plan
- Economic analysis: project finance, project cost estimates,
etc.
The study will form part of Andalas and Pertamina’s joint
submission to PLN, following the acceptance of which, the necessary
project approvals can be sought. In conjunction Andalas and
Pertamina will execute a consortium agreement to set out Andalas’
economic interests in the first project. Andalas will keep
shareholders informed as to the progress being made towards these
objectives.
Dave Whitby, CEO of Andalas
Energy and Power, commented “We are very encouraged by the
continued progress being made under our cooperation agreement with
Pertamina. We have matured the relationship with Pertamina
from initial meetings in summer, through to our milestone
cooperation agreement in September, into the studies and project
evaluation required to secure a first joint project.
“Since signing the agreement with Pertamina, we have been struck
by the abundance of undeveloped gas discoveries in Riau, Jambi and South Sumatra. We believe our
relationship with Pertamina has the potential to give Andalas
access to an inventory of projects that far exceeds the value that
we can derive from our interest in our first standalone asset at
Tuba Obi East, which in itself has an estimated 43.7BCF of gas
capable of supporting its own 25MW power plant.”
**ENDS**
For further information, please contact:
David Whitby |
Andalas Energy and
Power Plc |
Tel: +62
21 2783 2316 |
Sarah Wharry
Craig Francis |
Cantor Fitzgerald
Europe
(Nominated Adviser and Joint Broker) |
Tel: +44 20 7894 7000 |
Lucy Williams
Charles Goodfellow |
Peterhouse Corporate Finance
Limited (Joint Broker) |
Tel: +44 20 7469 0930 |
Colin Rowbury |
Cornhill Capital (Joint Broker) |
Tel: +44 20 7710 9610 |
Frank Buhagiar
Susie Geliher |
St Brides Partners Limited |
Tel: +44 20 7236 1177 |