Financial Strategy Analysis for Development of Liquid Natural Gas LNG Power Plant to Replace Diesel Fuel Power Plant: Case Study LNG based PLTMG Tanjung Balai Karimun 3x4 MW

Rosa Darman, M. Wibisono

2021

Abstract

Many of the islands around Batam use diesel power plants (PLTD) to generate electricity. The cost of operating these plants is very expensive since they use expensive diesel fuel and tend to experience significant increases, so that it burdens the government and users if they subsidize the electricity tariff. PT XYZ intends to expand its business by becoming a supplier of electricity to the islands around Batam by using a Gas Engine Power Plant (PLTMG) to replace the existing PLTD on the islands. To determine whether the PLTMG construction has business feasibility, and the electricity tariff is cheaper than the PLTD tariff, research is carried out that focuses on the Business Feasibility for the PLTMG construction and the selection of gas transportation modes will be best to supply gas to the generating site. By using the economic feasibility parameters NPV, IRR, PBP and BCR and by conducting sensitivity analysis and risk management, it is expected that the results of this study will provide clear, safe and comprehensive guidance for management in order to grow and develop their electricity business. After conducting a Technical Study and Business Feasibility Analysis, it was found that the PLTMG construction was feasible to be implemented on Karimun Island with a capacity of 3 x 4 MW using ISO Tanks and LCT ships to transport natural gas in the form of LNG. PT XYZ will benefit from the construction of a PLTMG of IDR17,327,179,295, - in the first year with an electricity tariff of IDR1.805/kWh. And when compared to the current PLTD electricity tariff of IDR 3,000/kWh, the PLTMG electricity tariff are much cheaper. In addition, this will also provide significant savings in the cost of providing electricity for PT PLN (Persero) WRKR of IDR106,775,640,000/year.

Paper Citation

in Harvard Style

Darman R. and Wibisono M. (2021). Financial Strategy Analysis for Development of Liquid Natural Gas LNG Power Plant to Replace Diesel Fuel Power Plant: Case Study LNG based PLTMG Tanjung Balai Karimun 3x4 MW. In Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS, ISBN 978-989-758-605-7, pages 360-365. DOI: 10.5220/0010923100003255

in Bibtex Style

@conference{icaess21,
author={Rosa Darman and M. Wibisono},
title={Financial Strategy Analysis for Development of Liquid Natural Gas LNG Power Plant to Replace Diesel Fuel Power Plant: Case Study LNG based PLTMG Tanjung Balai Karimun 3x4 MW},
booktitle={Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,},
year={2021},
pages={360-365},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010923100003255},
isbn={978-989-758-605-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,
TI - Financial Strategy Analysis for Development of Liquid Natural Gas LNG Power Plant to Replace Diesel Fuel Power Plant: Case Study LNG based PLTMG Tanjung Balai Karimun 3x4 MW
SN - 978-989-758-605-7
AU - Darman R.
AU - Wibisono M.
PY - 2021
SP - 360
EP - 365
DO - 10.5220/0010923100003255