Keppel Offshore & Marine (Keppel O&M) has entered into a deal to explore opportunities in the development of small-scale liquefied natural gas (LNG) distribution in West Indonesia.
The Heads of Agreement (HOA) was signed with Pavilion Energy and Indonesia state-owned PT Perusahaan Listrik Negara (PLN) at the Singapore-Indonesia Leaders’ Retreat in Singapore.
The HOA intends to leverage on the combined expertise of the companies in the small-scale LNG value chain to distribute LNG in an economic manner to remote areas in West Indonesia. LNG can be delivered to floating and onshore LNG terminals using small LNG carriers, where it is regasified and used to generate electricity at PLN’s power plants.
The contract follows the discussion between the Indonesia and Singapore governments regarding bilateral energy cooperation during the Singapore-Indonesia Leaders’ Retreat held in Semarang last year. A joint feasibility study was subsequently carried out, which demonstrated the cost savings and mutual benefits that can arise from collaboration in the small-scale LNG value chain.
Keppel O&M informed that the deal will not have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the financial year ending December 31, 2017.