FSRU for Asia’s gas-to-power project comes into operation

Japanese shipping heavyweight Mitsui O.S.K. Lines (MOL) has kicked off commercial operations for a floating storage and regasification unit (FSRU) to provide liquefied natural gas (LNG) to a power plant in West Java, Indonesia. This project is described as Asia’s first gas-to-power project using FSRU, electric generation, and gas-related facilities developed in an integrated manner.

FSRU Jawa Satu and LNG carrier for ship-to-ship LNG transport; Source: MOL

In December 2018, MOL inked deals for the construction of an FSRU, FSRU services, and financing for the Jawa 1 gas-fired project, through PT Jawa Satu Regas (JSR), a jointly established company with PT Pertamina, Marubeni Corporation, and Sojitz Corporation. As a result, the Japanese shipowner was entrusted with FSRU construction supervision, maintenance, and operation services.

This project was co-financed by the Japan Bank for International Cooperation, Asia Development Bank, Mizuho Bank, MUFG Bank, Oversea Chinese Banking Corporation, Crédit Agricole Corporate and Investment Bank, and Societe Generale Bank & Trust. While the MOL-operated FSRU was destined to be placed 14 km offshore in the Cilamaya Sea, east of Jakarta, the power plant was expected to be constructed onshore near the FSRU site, and connected to the FSRU via a 21 km long pipeline.

According to MOL, the launch of commercial operation for the Jawa 1 LNG-fired power plant’s FSRU Jawa Satu took place on March 29 in Indonesia. This FSRU will receive LNG for power generation from LNG carriers via the ship-to-ship transfer operation, store, regasify, and supply it to PT Jawa Satu Power, which operates a large-scale LNG-fired power plant in West Java, with a generating capacity of 1,760 MW.

“This is the first gas-to-power project in Asia, where power generation facilities and gas-related facilities using FSRU are being developed as an integral element of the power generation process. Electricity generated by the plant will be supplied to PT. PLN (Persero) (PLN), Indonesia’s state-owned electricity company, for 25 years,” highlighted the Japanese player.

FSRU Jawa Satu arriving in Indonesia; Source: MOL
FSRU Jawa Satu arriving in Indonesia; Source: MOL

Moreover, MOL is adamant that this project will enable it to play “a key role” in ensuring a stable supply of electricity for Indonesia, based on its accumulated achievements and experience in LNG carrier and FSRU operation, while promoting its FSRU business, which meets diverse customer needs for LNG procurement.

Furthermore, the company plans to pursue a proactive approach to participating in and contributing to various value chains in the clean energy industry from upstream to downstream in line with the MOL Group’s vision of developing a variety of social infrastructure businesses in addition to traditional shipping businesses.

The Japanese firm outlined its growth goals in the offshore and non-shipping businesses within the ‘Blue Action 2035’ management plan and the strategy of “expanding low-carbon/decarbonized business by leveraging the group’s collective strengths” in the ‘Environmental Vision 2.2.’ 

The start of commercial operation for the FSRU Jawa Satu comes shortly after SeaLoading Holding, a subsidiary of MOL, signed a charter contract with Petrobras for a cargo transfer vessel (CTV) and penned a memorandum of understanding (MoU) to embark on negotiations by year-end to build a new CTV.

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MOL, which is set on improving efficiency and reducing environmental impact in the supply chain from crude oil production and storage to offloading, also recently secured a long-term charter contract for a newbuild LNG carrier with Tokyo LNG Tanker (TLT), a subsidiary of compatriot gas supplier Tokyo Gas.