TEMPO.CO, Jakarta - State power company PLN said it will not import gas from Singapore but will cooperate with Singaporean companies to build gas infrastructure.

PLN business director for Central Java Amir Rosidin said the company and Singapore's Pavilion Energy and Keppel Corporation will build small-scale LNG regasification terminals in Natuna and Tanjung Pinang. The terminals will be adjacent to the LNG terminal hub located in Singapore.

"There is no gas import from Singapore, this is only a partnership for gas infrastructure developers. We have not determined the price and the value because it is still being studied for feasibility," he said on Monday, September 11.

Read: PLN Looks at Gas Storage Facility Offer from Singapore

The cooperation is to create a framework concept to distribute PLN's LNG to power plants in Tanjung Pinang and Natuna.

Amir said that the partnership is aimed at lowering the cost of electricity production, as the proximity will cut operating costs and basic production cost in Sumatra.

PLN and the two Singaporean companies have signed the head of agreement (HoA) in Singapore. The HoA includes the preparation of a more in-depth feasibility study related to LNG distribution to Tanjung Pinang and Natuna.

Amir said the cooperation is based on mutual benefits and will be carried out for six months from the time of the contract signing. If the study shows that the project is not feasible, it will not proceed to the agreement stage.

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