Keppel and Pavilion in Indonesia small-scale LNG deal

Singapore’s Keppel Offshore & Marine Limited and compatriot Pavilion Energy are set to explore opportunities in the development of small-scale liquefied natural gas (LNG) distribution in West Indonesia.

The duo entered into a heads of agreement with Indonesia state-owned PT Perusahaan Listrik Negara (PLN). The signing of the agreement took place at the Singapore-Indonesia Leaders’ Retreat in Singapore.

The deal 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, according to a Keppel statement.

“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,” the statement said.

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.