Although he had joined the family business Kayan Patria Pratama (KPP) in 2012 to help stabilize its coal operations, by 2016 Antony Lesmana says he had clearly seen the writing on the wall.
“Production had been growing steadily, but from 2012–2016, coal prices had been gradually declining each year,” he tells The CEO Magazine. “By 2016, I had come to believe that coal was a sunset business.”
A board meeting was held where the decision was made to strike out in a fresh direction – cleaner energy. Lesmana was asked to take charge of this new venture. He already had a wealth of experience under his belt working for KPP and before that for Shell in Canada, where he had also obtained bachelor’s and master’s degrees in mining engineering.
“LNG is the perfect partner for renewable energy that is intermittent like solar and wind.”
In 2018, Kayan Hydropower Nusantara, a joint venture between KPP Group and Sarawak Energy, was formed and Lesmana was appointed CEO. Adaro Energy Indonesia later joined the venture in 2022.
Kayan Hydropower Nusantara has just commenced construction on the US$2.6 billion Mentarang Induk Hydroelectric Power Plant project, which is expected to take seven years to complete. The facility will have a capacity of 1.3 gigawatts and will be Indonesia’s largest hydropower plant.
While solar power has become another focus, with the Group already the owner of solar farms that generate around 200 megawatts, Lesmana saw the need to add liquefied natural gas (LNG) into the mix.
“LNG is the perfect partner for renewable energy that is intermittent like solar and wind,” he explains, with Kayan LNG Nusantara set up to oversee these operations and Lesmana the President Director.
With the firm goal of developing a local market in Indonesia, Lesmana wants the company’s LNG to be used widely to support the economic growth of Indonesia. But obstacles exist on this front too.
“We believe that the gas belongs to Indonesia,” he reveals. “Many supply chains have not been properly developed throughout the years so it’s very hard to supply LNG to the end customer because the logistic supply chain has not been developed.”
In the first phase of this arrangement, Kayan LNG Nusantara will supply a number of customers, including in North Sulawesi, according to Lesmana.
But ever pragmatic, he anticipates that there will be challenges on the horizon, with forces at play such as global conflict, deglobalization and inflation.
“By 2016, I had come to believe that coal was a sunset business.”
“I want to make sure that plant production will be smooth supplying LNG to all our customers so that we can deliver it on time and on spec,” he says.
That is his first goal and one that he anticipates will take precedence over the next few years. Next on the agenda is unlocking demand.
“We have export customers and we also have an established supply chain in Indonesia for domestic customers,” he points out. “I hope more investment will be made into the upstream side as we have dreams to build an LNG train 2 and LNG train 3 as well for Kayan LNG.”
In addition, Lesmana plans to build solar farms next to Kayan LNG Nusantara’s train. The company has already acquired 30 hectares of land to be put to this use, with a feasibility study currently underway.
“We are now looking to produce carbon neutral LNG,” he reveals.
This is just one way that sustainability is influencing the way the organization works, with Lesmana working hard to incorporate it into all areas of the business.
“This is the start of the industry. Cleaner energy is here to stay in Indonesia.”
“Because we are located in a remote area, we produce clean water for our own use and for our local community as well,” he confirms.
“This is the start of the industry. Cleaner energy is here to stay in Indonesia, especially small-scale LNG. We believe that LNG is the perfect partner for renewable energy and that’s especially true for Indonesia, which has more than 10,000 islands.
“By consistently treating people with respect, hopefully we can foster a collaborative environment to provide this cleaner energy for all in Indonesia.”