Share Name Share Symbol Market Type Share ISIN Share Description
Andalas Energy And Power PLC LSE:ADL London Ordinary Share IM00B1FPZP63 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 0.039p 0.038p 0.04p 0.039p 0.039p 0.039p 0 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Alternative Energy 0.0 -3.6 -0.1 - 2.33

Andalas Energy and Power Plc New IPP Project, Gas Sales MOU and Joint Venture

27/11/2017 7:00am

UK Regulatory (RNS & others)


 
TIDMADL 
 
Andalas Energy and Power Plc 
 
                         ('Andalas', or the 'Company') 
 
               New IPP Project, Gas Sales MOU and Joint Venture 
 
Andalas Energy and Power plc (AIM:ADL) is pleased to announce that it has 
signed a gas sales memorandum of understanding ("Gas Sales MOU"), with a 
private Indonesian company, for the supply of gas to a new independent power 
project ("Sumatra-1") and commenced discussions with the Indonesian national 
power company, PLN, regarding procurement of the generating capacity. 
Sumatra-1 will be co-developed with PT Sinar Era Gemilang ("SEG") in accordance 
with a newly signed joint venture agreement with SEG for the development of 
independent power producer ("IPP") projects in Indonesia. 
 
Andalas and SEG have undertaken preliminary grid stability and demand studies 
for a 40MW IPP at Sumatra-1.  After preliminary discussions with PLN, Andalas 
and SEG have agreed to prepare and submit a written proposal requesting PLN 
commence procurement of the generating capacity which would include negotiation 
of a power purchase agreement.  The terms of the proposal will be refined after 
further discussions with PLN. 
 
Simon Gorringe, CEO of Andalas Energy & Power, commented, "The Sumatra-1 IPP 
represents further solid progress. It not only develops and strengthens our 
project portfolio of IPPs but also diversifies operational and counter party 
risk, being our first non-Pertamina project. It also underlines the potential 
for IPP projects in Sumatra, where there are available gas resources, 
experienced development partners, accessible grid infrastructure and power 
demand. 
 
"Our joint venture with SEG will bring significant benefits to both parties. 
SEG's understanding of the power market combined with our understanding of the 
gas market enhances our ability to identify and secure further power projects 
and we expect it will reduce third party development costs.  We expect the 
joint venture to be a nimble decision maker able to deliver outcomes against 
short timetables." 
 
Sumatra-1 Project & Gas Sales MOU Details 
 
  * Sumatra-1 is the name used by Andalas for the proposed 40 MW gas-fired 
    wellhead IPP located in South Sumatra. 
 
  * Andalas and SEG's preliminary grid stability and demand studies conclude 
    the transmission system is capable of evacuating power from the IPP and 
    there is a market for it within PLN. 
 
  * Gas Sales MOU provides that the parties will seek to agree a gas sales 
    agreement for the supply of 6 MMscfd for a period of at least 15 years at 
    such price as qualifies the project for direct appointment (i.e. without 
    public tender) in accordance with Indonesian laws and regulations.The Gas 
    Sales MOU enables Andalas to progress discussions with PLN. 
 
  * A written proposal, together with grid stability and demand feasibility 
    studies, is being prepared and expected to be submitted to PLN shortly.If 
    PLN accepts the proposal, we expect the project to be either included in 
    the Indonesian Electricity Business Plan ("RUPTL") or progressed as a small 
    power project.We would expect then to enter into further discussions 
    regarding the technical features of the proposal, pre-qualification of the 
    participants and then to negotiate a power purchase agreement. 
 
SEG Joint Venture Details 
 
  * SEG is a wholly owned subsidiary of PT Synergy which provides professional 
    engineering and construction services to the energy sector.Its power 
    systems business undertakes power system studies for industrial, utility 
    and commercial customers, power system design planning and optimisation and 
    operational trouble shooting, electrical safety audits and data 
    management.The Synergy group signed a power purchase agreement with PLN on 
    2 August 2017 for the development an Indonesian solar project. 
 
  * Andalas and SEG signed joint venture agreement to co-develop gas-fired 
    wellhead IPP projects. 
 
  * Each party will contribute its respective expertise to the joint venture at 
    its own cost and the parties will share agreed third party costs in 
    proportion to their respective participation interests (Andalas 80%; SEG 
    20%). 
 
  * The expertise of Andalas and SEG will enable the joint venture to 
    efficiently identify, evaluate and secure power projects. 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014 ('MAR').  Upon the publication of this announcement via a 
Regulatory Information Service ('RIS'), this inside information is now 
considered to be in the public domain. 
 
For further information, please contact: 
 
David Whitby    Andalas Energy and Power Plc               Tel:  +62 21 2783 
                                                           2316 
 
Sarah Wharry    Cantor Fitzgerald Europe                   Tel: +44 20 7894 
                (Nominated Adviser and Joint Broker)       7000 
 
Jon Belliss     Beaufort Securities Limited                Tel: +44 20 7382 
                (Joint Broker)                             8415 
 
                                   **ENDS** 
 
Glossary: 
 
IPP                   independent power producer 
 
MMscfd             million standard cubic feet per day 
 
Pertamina         PT Pertamina (Persero) 
 
PLN                  PT PLN (Persero) 
 
RUPTL              Rencana Usaha Penyediaan Tenaga Listrik is Indonesia's 
electricity business plan.  It contains demand forecasts, future expansion 
plans, electricity production forecasts, fuel requirements and indicates which 
projects are planned to be developed by PLN and independent power project 
investors. 
 
 
 
END 
 

(END) Dow Jones Newswires

November 27, 2017 02:00 ET (07:00 GMT)

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