Andalas Energy and
Power Plc
(‘Andalas’, or the
‘Company’)
New IPP Project,
Gas Sales MOU and Joint Venture
Andalas Energy and Power plc (AIM:ADL) is pleased to announce
that it has signed a gas sales memorandum of understanding (“Gas
Sales MOU”), with a private Indonesian company, for the supply of
gas to a new independent power project (“Sumatra-1”) and commenced
discussions with the Indonesian national power company, PLN,
regarding procurement of the generating capacity.
Sumatra-1 will be co-developed
with PT Sinar Era Gemilang (“SEG”) in accordance with a newly
signed joint venture agreement with SEG for the development of
independent power producer (“IPP”) projects in Indonesia.
Andalas and SEG have undertaken preliminary grid stability and
demand studies for a 40MW IPP at Sumatra-1. After preliminary discussions
with PLN, Andalas and SEG have agreed to prepare and submit a
written proposal requesting PLN commence procurement of the
generating capacity which would include negotiation of a power
purchase agreement. The terms of the proposal will be refined
after further discussions with PLN.
Simon Gorringe, CEO of Andalas
Energy & Power, commented, “The Sumatra-1 IPP represents
further solid progress. It not only develops and strengthens our
project portfolio of IPPs but also diversifies operational and
counter party risk, being our first non-Pertamina project. It also
underlines the potential for IPP projects in Sumatra, where there are available gas
resources, experienced development partners, accessible grid
infrastructure and power demand.
“Our joint venture with SEG will bring significant benefits to
both parties. SEG’s understanding of the power market
combined with our understanding of the gas market enhances our
ability to identify and secure further power projects and we expect
it will reduce third party development costs. We expect the
joint venture to be a nimble decision maker able to deliver
outcomes against short timetables.”
Sumatra-1 Project & Gas Sales MOU
Details
-
Sumatra-1 is the name used by
Andalas for the proposed 40 MW gas-fired wellhead IPP located in
South Sumatra.
-
Andalas and SEG’s preliminary grid stability and demand studies
conclude the transmission system is capable of evacuating power
from the IPP and there is a market for it within PLN.
-
Gas Sales MOU provides that the parties will seek to agree a gas
sales agreement for the supply of 6 MMscfd for a period of at least
15 years at such price as qualifies the project for direct
appointment (i.e. without public tender) in accordance with
Indonesian laws and regulations.The Gas Sales MOU enables Andalas
to progress discussions with PLN.
-
A written proposal, together with grid stability and demand
feasibility studies, is being prepared and expected to be submitted
to PLN shortly.If PLN accepts the proposal, we expect the project
to be either included in the Indonesian Electricity Business Plan
(“RUPTL”) or progressed as a small power project.We would expect
then to enter into further discussions regarding the technical
features of the proposal, pre-qualification of the participants and
then to negotiate a power purchase agreement.
SEG Joint Venture Details
-
SEG is a wholly owned subsidiary of PT Synergy which provides
professional engineering and construction services to the energy
sector.Its power systems business undertakes power system studies
for industrial, utility and commercial customers, power system
design planning and optimisation and operational trouble shooting,
electrical safety audits and data management.The Synergy group
signed a power purchase agreement with PLN on 2 August 2017 for the development an Indonesian
solar project.
-
Andalas and SEG signed joint venture agreement to co-develop
gas-fired wellhead IPP projects.
-
Each party will contribute its respective expertise to the joint
venture at its own cost and the parties will share agreed third
party costs in proportion to their respective participation
interests (Andalas 80%; SEG 20%).
-
The expertise of Andalas and SEG will enable the joint venture
to efficiently identify, evaluate and secure power projects.
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ('MAR’). Upon the publication of this
announcement via a Regulatory Information Service ('RIS'), this
inside information is now considered to be in the public
domain.
For further information, please contact:
David Whitby |
Andalas Energy and Power Plc |
Tel: +62 21 2783 2316 |
Sarah Wharry
|
Cantor Fitzgerald Europe
(Nominated Adviser and Joint Broker) |
Tel: +44 20 7894 7000 |
Jon Belliss |
Beaufort Securities Limited
(Joint Broker) |
Tel: +44 20 7382 8415 |
**ENDS**
Glossary:
IPP
independent power producer
MMscfd
million standard cubic feet per day
Pertamina PT
Pertamina (Persero)
PLN
PT PLN (Persero)
RUPTL
Rencana Usaha Penyediaan Tenaga Listrik is Indonesia’s
electricity business plan. It contains demand forecasts,
future expansion plans, electricity production forecasts, fuel
requirements and indicates which projects are planned to be
developed by PLN and independent power project investors.