Andalas Energy and Power Plc First G2P Project Submitted for Government Approval

 
TIDMADL 
 
16 December 2016 
 
                         Andalas Energy and Power Plc 
 
                         ('Andalas', or the 'Company') 
 
         First Gas-to-Power Project Submitted for Government Approval 
 
Andalas Energy and Power Plc, the AIM traded Indonesian focused energy company 
(AIM: ADL), is pleased to announce that it has submitted an application for its 
first gas to power project of 2 x 30MW ('the Project') to be included in the 
Republic of Indonesia's Electricity Supply Business Plan ('RUPTL').  The 
application follows the signing of an agreement with PT Pertamina (Persero) 
('Pertamina'), Indonesia's national energy company, to fast-track the 
commercialisation of proven gas fields within Pertamina's acreage in Sumatra, 
via the roll-out of the Company's gas to power strategy (see announcement of 1 
September 2016 for further details). 
 
First Gas to Power Project with Pertamina 
 
  * Project is in line with strategy to develop a portfolio of small (i.e. less 
    than 100 MW) independent power producer projects ('IPPs') fired with gas 
    from proven fields 
 
      + Five IPPs totalling 250-500MW of installed capacity initially targeted 
 
  * Application is the culmination of over four months of intensive work by the 
    Andalas and Pertamina teams and further validates Andalas' in-country 
    expertise 
 
  * Submission completed following a process including identification and 
    screening of Pertamina's extensive inventory of discovered gas fields; 
    assessment of regional electricity demand, grid infrastructure and 
    capacity; gas resources evaluation and modelling; process design; financial 
    modelling; and the completion of a feasibility study for a two x 30 MW 
    project in tandem with the engineering division of PT PLN (Persero) 
    ('PLN'), Indonesia's national electricity company 
 
  * A technical review is scheduled with PLN to obtain the required approval 
    prior to the Project being presented to the Energy Minister for final 
    approval for entry of the Project onto the RUPTL 
 
  * Initial preparations and discussions have commenced with major 
    international contractors in respect of the front-end engineering and 
    design ('FEED') phase, which will include design and tendering of major 
    services and equipment, and will continue in the New Year with a view 
    towards completion in 2017 ahead of construction 
 
Project Finance 
 
  * Approval will significantly de-risk the Project, unlock value and open up 
    multiple funding options including sale of part of its interest to third 
    parties 
 
  * The Project will be project financed with discussions ongoing with 
    equipment vendors and with the UK export trade agency 
 
  * Expressions of interest already received from industry participants and 
    project finance specialists including power companies and power equipment 
    suppliers who understand the energy dynamic in Indonesia and the inherent 
    and future project value 
 
Pipeline of Projects 
 
  * First project provides the model for Andalas to develop additional gas to 
    power projects in Indonesia 
 
  * The first project with Pertamina is our primary focus due to the potential 
    for first power and revenue generation to be fast tracked in cooperation 
    with Pertamina 
 
  * Growing pipeline of identified gas discoveries that can support new 
    generating capacity of between 50 and 100 MW per project, both in 
    partnership with Pertamina as well as with third parties, including those 
    at Tuba Obi East ('TOE'), which remains in Andalas' project inventory 
 
Dave Whitby, CEO of Andalas, said, "To have submitted our first gas to power 
project for inclusion on to the RUPTL within four months of signing a 
cooperation agreement with Pertamina is testament to the calibre of our 
management team and its standing within Indonesia's energy industry.  Approval 
of our application will be a milestone event for Andalas.  Together with the 
Project's strong economics, fast pay-back and excellent revenue visibility, 
based on long term gas sales contracts, approval will also act as a value 
trigger event. 
 
As the co-originator of projects with Pertamina we have the option to farm down 
our interest in those projects to future consortium members to provide a source 
of capital to finance ongoing operations.  Our initial target with Pertamina is 
to originate five independent power projects totalling 250-500MW.  As we 
de-risk the first project, the path through which we will be able to bring 
additional projects through the engineering, procurement, financing and 
construction phases will continue to be proven. 
 
In our view, Indonesian power represents one of the most attractive investment 
opportunities in energy in the entire ASEAN region.  Coupled with strong 
economic fundamentals, a supportive government and the support of national 
energy companies, Andalas expects to maintain its momentum in progressing its 
existing projects, whilst continuing to originate new projects.  In gas to 
power we have identified a company-making opportunity, one which we are focused 
on fully capitalising on." 
 
                                   **ENDS** 
 
For further information, please contact: 
 
David Whitby          Andalas Energy and Power Plc   Tel: [phone] 
 
Sarah Wharry          Cantor Fitzgerald Europe       Tel: [phone] 
Craig Francis         (Nominated Adviser and Joint 
                      Broker) 
 
 
Frank Buhagiar        St Brides Partners Limited     Tel: [phone] 
Susie Geliher 
 
 
 
END 
 

(END) Dow Jones Newswires

December 16, 2016 02:00 ET (07:00 GMT)