Utilization of idle power plant for own use and excess power in an oil-and-gas company

Abstract

The Indonesian government (GoI) applies the cost recovery concept in the upstream sector of the oil and gas resources. It postulates the expenses spent by the contractor during exploration and exploitation activities will be settled through production sharing scheme. The cost includes the compensation for the production equipment and utilities, not to mention the power generator. When the oil-and-gas exploitation declines or even shut-in due to technical and economic reasons, some of them become idle assets. In this study, we investigate the utilization of the idle 2 × 750 kVA gas engine power generators for a new gas facilities project in different region. As the newly facilities require a smaller power supply (2 × 350 kVA) than the power plant capacity, the excess power is proposed to be sold to the electric utility. Here, an economic analysis is carried out to compare between purchasing new power generators and the utilization of the idle ones. The result shows that the utilization of idle asset provides economic benefit both for the GoI and the contractor. This scheme will solve the electricity need for own use and the excess power may be transferred to the electric utility, realized by power purchase agreement.