16 December 2016
Andalas Energy and
Power Plc
(‘Andalas’, or the
‘Company’)
First Gas-to-Power
Project Submitted for Government Approval
Andalas Energy and Power Plc, the AIM traded Indonesian focused
energy company (AIM: ADL), is pleased to announce that it has
submitted an application for its first gas to power project of 2 x
30MW (‘the Project’) to be included in the Republic of Indonesia’s
Electricity Supply Business Plan (‘RUPTL’). The application
follows the signing of an agreement with PT Pertamina (Persero)
(‘Pertamina’), Indonesia’s national energy company, to fast-track
the commercialisation of proven gas fields within Pertamina’s
acreage in Sumatra, via the
roll-out of the Company’s gas to power strategy (see announcement
of 1 September 2016 for further
details).
First Gas to Power Project with
Pertamina
-
Project is in line with strategy to develop a portfolio of small
(i.e. less than 100 MW) independent power producer projects
(‘IPPs’) fired with gas from proven fields
-
Application is the culmination of over four months of intensive
work by the Andalas and Pertamina teams and further validates
Andalas' in-country expertise
-
Submission completed following a process including
identification and screening of Pertamina’s extensive inventory of
discovered gas fields; assessment of regional electricity demand,
grid infrastructure and capacity; gas resources evaluation and
modelling; process design; financial modelling; and the completion
of a feasibility study for a two x 30 MW project in tandem with the
engineering division of PT PLN (Persero) (‘PLN’), Indonesia’s
national electricity company
-
A technical review is scheduled with PLN to obtain the required
approval prior to the Project being presented to the Energy
Minister for final approval for entry of the Project onto the
RUPTL
-
Initial preparations and discussions have commenced with major
international contractors in respect of the front-end engineering
and design (‘FEED’) phase, which will include design and tendering
of major services and equipment, and will continue in the New Year
with a view towards completion in 2017 ahead of construction
Project Finance
-
Approval will significantly de-risk the Project, unlock value
and open up multiple funding options including sale of part of its
interest to third parties
-
The Project will be project financed with discussions ongoing
with equipment vendors and with the UK export trade agency
-
Expressions of interest already received from industry
participants and project finance specialists including power
companies and power equipment suppliers who understand the energy
dynamic in Indonesia and the
inherent and future project value
Pipeline of Projects
-
First project provides the model for Andalas to develop
additional gas to power projects in Indonesia
-
The first project with Pertamina is our primary focus due to the
potential for first power and revenue generation to be fast tracked
in cooperation with Pertamina
-
Growing pipeline of identified gas discoveries that can support
new generating capacity of between 50 and 100 MW per project, both
in partnership with Pertamina as well as with third parties,
including those at Tuba Obi East (‘TOE’), which remains in Andalas’
project inventory
Dave Whitby, CEO of Andalas,
said, “To have submitted our first gas to power project for
inclusion on to the RUPTL within four months of signing a
cooperation agreement with Pertamina is testament to the calibre of
our management team and its standing within Indonesia’s energy
industry. Approval of our application will be a milestone
event for Andalas. Together with the Project’s strong
economics, fast pay-back and excellent revenue visibility, based on
long term gas sales contracts, approval will also act as a value
trigger event.
As the co-originator of projects with Pertamina we have the
option to farm down our interest in those projects to future
consortium members to provide a source of capital to finance
ongoing operations. Our initial target with Pertamina is to
originate five independent power projects totalling
250-500MW. As we de-risk the first project, the path through
which we will be able to bring additional projects through the
engineering, procurement, financing and construction phases will
continue to be proven.
In our view, Indonesian power represents one of the most
attractive investment opportunities in energy in the entire ASEAN
region. Coupled with strong economic fundamentals, a
supportive government and the support of national energy companies,
Andalas expects to maintain its momentum in progressing its
existing projects, whilst continuing to originate new projects.
In gas to power we have identified a company-making
opportunity, one which we are focused on fully capitalising
on.”
**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 |
Frank Buhagiar
Susie Geliher |
St Brides Partners Limited |
Tel: +44 20 7236 1177 |