PGN’s boss opens up about the cost of building a gas pipeline in RI

Jakarta, CNBC Indonesia – Indonesia has an abundant gas supply and also a large market share. But unfortunately, the limited infrastructure, especially the pipes to absorb the gas, has prevented the Indonesian people from using this abundant supply optimally.

Ironically again, Indonesia has instead chosen to import other energy, namely Liquefied Petroleum Gas (LPG) and fuel oil (BBM). In 2020, LPG imports even reached 6.4 million metric tons (MT) and fuel imports amounted to 111.8 million barrels.

In fact, gas can be used for all purposes, from a household scale, such as through the city gas network, industry, and even for the transportation sector to replace BBM.

So, what is the main reason why Indonesia still lacks gas infrastructure?

Suko Hartono, President Director of PT Perusahaan Gas Negara Tbk (PGAS), also revealed a number of obstacles to gas infrastructure development, especially gas pipelines in the country.

He admitted that in Indonesia, the supply of gas is more than the supply of oil and the demand is quite large. However, he added, Indonesia is unique in that the position of gas supply is far from the location of the gas absorber. Therefore, infrastructure is needed to connect gas supply and demand.

Considering that Indonesia is an archipelagic country, according to him the infrastructure that must be built is varied, it is not enough just to go through pipes. He said, there are at least three types of infrastructure that need to be built, namely the transportation of gas by land using pipes, then via LNG ships to transport liquefied gas, and also transporters. Compressed Natural Gas (CNG).

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“So that gas supplies such as LNG or CNG can be delivered to demand, need to be carried by ship. But that’s not enough, there’s more storage (storage) which needs to be built, then the regasification unit if it is LNG. So, gas infrastructure is expensive, “he said in Jakarta, Monday (19/04/2021).

He revealed that PGN also estimates that the investment requirement to build gas infrastructure in the country by 2026 will reach US $ 4-5 billion or around or around Rp. 58 trillion-Rp. 72.5 trillion (assuming an exchange rate of Rp. 14,500 per US $).

Given the amount of funds required, the company will collaborate with partners, so that the investment can be shared.

“The investment needs until 2026, we need US $ 4-5 billion (billion), but we’re looking for it partner to do together, “he said.

The funds will be used to build at least nine gas pipelines, especially transmission pipelines, and 13 non-pipeline transportation projects such as LNG ships and regasification facilities. The project is listed in the Gas Infrastructure Master Plan Project created by the company.

“We will carry out this Master Plan until 2026,” he said.

If this gas infrastructure project has been built and connected, then according to him, gas can be used for the benefit of the community, even down to the household level, because the company will also build gas distribution pipelines and city gas networks (jargas).

“Now we are building jargas. Gas prices can be cheaper (compared to LPG). Previously, LPG was because it was the easiest to immediately replace kerosene,” he said.

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The following is a list of gas infrastructure projects listed in the Indonesian Gas Infrastructure Master Plan until 2026:

Pipe project:
1. Dumai-Sei Mangke gas pipeline
2. Pipa gas WNTS-Pemping
3. Plaju Factory gas pipeline
4. Pipa Integrasi SSWJ-WJA
5. Balongan Factory gas pipeline
6. Cirebon-Semarang gas pipeline
7. Oil Gas Facility Pipeline
8. Pipa gas smelter Freeport
9. Gas pipeline Senipah-Kilang Balikpapan

Of the nine pipeline projects, there are still two transmission pipelines that have not been built or progress has not been made, namely the Dumai-Sei Mangke and Cirebon-Semarang transmission pipelines.

Meanwhile for project non pipeline gas transport, among others:
1. Cilacap LNG Facility
2. Tuban Regasification
3. Teluk Lamong LNG Facility
4. Antam’s LNG Smelter Regasification
5. LNG Shipping Cluster Sumatera
6. LNG Shipping Cluster West Kalimantan
7. Iso Tank PLTMG Tanjung Selor
8. LNG Shipping Cluster Nusa Tenggara
9. LNG Shipping Cluster Sulawesi
10. LNG Shipping Cluster Maluku Utara
11. LNG Shipping Cluster Maluku
12. LNG Shipping Cluster North Papua
13. LNG Shipping Cluster South Papua.

[Gambas:Video CNBC]



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