Korea-led group wins Indonesia's power plant service deal

In Indonesia, some 5.9 trillion won worth of outdated offshore plants are expected to be demolished, S.Korea says

S.Korean President Yoon Suk Yeol (fourth from left) holds a summit meeting with Indonesian President Joko Widodo in Jakarta during the ASEAN Summit 2023

Sang-Yong Park 2

2024-02-26 17:27:46 yourpencil@hankyung.com

Energy

A consortium led by South Korean companies has bagged 130 billion won ($98 million) worth of an offshore plant service order from Indonesia under a private and public partnership, the Ministry of Oceans and Fisheries said on Monday.

Under the build-operate-transfer contract, they will build liquid natural gas (LNG) distribution network for offshore plants of PLN Energi Primer Indonesia and to transform coal-fueled power stations into LNG facilities in Nusa Tenggara, the southernmost province of Indonesia.

The consortium includes LNG Korea Co., Khan Plant Co., Korea Gas Technology Co., Indonesia’s PT APCA and two other Indonesian companies.

PLN Energi Primer Indonesia is a subsidiary of the country's state-run power utility. In March last year, it launched a 3.9 trillion won worth of 22-year projects to convert offshore coal power plants into LNG facilities in Nusa Tenggara and Sulawesi Maluku, home to Indonesia’s two power plant clusters.

(Courtesy of the South Korean Ministry of Oceans and Fisheries)

An offshore plant service provider offers transport, installation, management, repair and maintenance services, as well as operation and remodeling. It makes up more than 50% of the value created in the offshore plant industry, according to the fisheries industry.

The consortium will offer the services for the next 20 years after completing the construction of relevant facilities for two years, the ministry said.

Another South Korean consortium has submitted a bid for the Sulawesi Maluku offshore plant project. Indonesia will select its contractor next month.

In Indonesia, about 630 units of offshore plants are being fueled by petroleum and natural gas and among them, some 5.9 trillion won worth of outdated plants are expected to be demolished in the coming years, according to the ministry.

The fisheries ministry had undertaken the business feasibility study on the Indonesian offshore plant projects from 2020 to 2021 and launched a joint study on them with Indonesia to raise the chances of winning the orders, the ministry said.

Seoul runs a South Korean and Indonesia offshore plant cooperation center in Jakarta to support small and medium-sized Korean enterprises’ foray into Indonesia’s offshore plant market.

Write to Sang-Yong Park at yourpencil@hankyung.com

Yeonhee Kim edited this article.